We understand better with graphics?

keep roaring!

Just read a paper from University of Chicago entitled “Human Judgement Accuracy, Multidimensional Graphics, and Humans vs Models”.

The objective of the paper was to check whether graphics aid humans in the detection of changes in firms’ performance and consequently reflect their judgement in bond’s rating of bonds from the respective companies.

So the researchers showed financial info in “boring” tabular format and then “pictorial” format to groups of people with different levels of financial accounting training.

Results

  • The research confirmed our common understanding that graphics do help with our understanding of any issue, including complex financial results.
  • This behaviour is similar to people from different levels of financial accounting training. This means that even the highly trained/”practiced” professionals would also get additional understanding.

Applications

  • So at work, can we try to present to our bosses in pictorial format ie. at least use bar charts and pie charts, to help them with their understanding?
  • If you are reading financial statments from public listed companies, they come with all the bells and whistles in term of presentation. For presentation of results to the press, go check out the powerpoints they use. You download a copy of SMRT’s if you wish.
  • Edgar should put more pictures in his notes to help his charges.

So we are kindergarten kids, basically?

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One Comment

  1. hi edgar,i just want to say thank you for posting the teacher’s conference slides on your site! it was really helpful.can you comment where steve scott says he might “target ” certain ratios/calculations?thanksPe.

    Reply

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