UK Accounting Glossary
statistics A graphical display of numerical data in the form of upright bars, with the area of each bar representing frequency.
A histogram is a graph that shows how many times an event occurs across various groups of data or classes. A histogram can give an approximate idea of the frequency distribution of the given data. To construct a histogram, the classes are usually plotted against the x-axis and the frequencies are shown on the y-axis. In appearance, a histogram looks like a series of rectangular bars adjacent to each other – very similar to a bar chart. You may also come across the term ‘bins’ being used instead of classes. The selection of the bin size is important. Indeed, an histogram with a bin size too large may hide key information whereas a bin size too small may highlight random data patterns. The height of each rectangle is equal to the frequency for that particular class (i.e. bin). By looking at a histogram you may be able to identify the shape of the frequency distribution (i.e chi-square, normal, etc.) It is also possible to visualize if the distribution is skewed or symmetric. The mode can also be determined through a histogram. The frequency that corresponds to the tallest rectangle in a histogram is the mode for that distribution. Statisticians often use a boxplot in conjunction with an histogram in data analysis.
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This glossary post was last updated: 9th February 2020.