Business Statistics Formula – Cheat Sheet / Handbook

Business Statistics Formula Handbook

Table of Contents

Measures of Central Tendency

Measures of Dispersion




Test of Hypothesis

Chi-Square Test

Index Numbers



Measures of Central Tendency – MEAN, MEDIAN, MODE

MEAN – It is the average of a given set of observation.

Ungrouped data

Grouped data

Direct Method:

Shortcut Method:

Combined Mean:

MEDIAN – It is the middle value of an observation

Ungrouped data:

Grouped data:

MODE – It is the value which occur the maximum number of times in a data

Ungrouped data:

Mode is the value which has the highest frequency.

Grouped data:

Relationship between Mean,Median and Mode

Measures of Dispersion

Range: It is the difference between the value of smallest observation and largest observation in a data.

Quartile Deviation:

Average Deviation:

Ungrouped Data:

Grouped Data:

Standard Deviation:

Ungrouped Data:

Assumed Mean Method:

Grouped Data:

S.D. of Natural Numbers:


Relationship between Measures of Variation:


Karl Pearson`s Co-efficient Method:

In case of Grouped data:

Spearman`s Rank Coefficient:

Regression Analysis

Regression Equation of Y on X:

Regression Equation of X on Y:

If deviations are taken from mean:

If deviations are taken from assumed mean:

Regression Coefficients:

Relation between coefficient of correlation and two regression coefficients:

Index numbers


Sample size determination:



Test of Hypothesis

Null Hypothesis – Ho

Alternate Hypothesis – H1

Size of Sample – n

Types of Tests – One tailed, Two Tailed, Right tailed, Left tailedSignType of TestKeyword to look for≠Two tailed TestOr Not, always, neverLeft Tailed TestHigher than, More than, IncreasedRight Tailed TestLower than, Less than, Decreased


  1. Formulate the hypothesis

  2. Set the significance level

  3. Decide the Test Statistic (z,t)

  4. Find out the critical value

  5. Make a conclusion

Use Z statistic when sample size is > 30

Use T statistic when sample size is < 30 and/or Standard Deviation is Unknown

Calculation of Z statistic


Difference of two mean



Difference of two Proportions

Calculation of T statistic:


Difference in two mean

Difference of two means with dependent samples

Chi Square Test



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