Business Statistics Formula – Cheat Sheet / Handbook

Business Statistics Formula Handbook

Table of Contents

Measures of Central Tendency

Measures of Dispersion

Correlation

Regression

Sampling

Test of Hypothesis

Chi-Square Test

Index Numbers

Interpolation

Extrapolation

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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:

Variance:

Relationship between Measures of Variation:

Correlation

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

Sampling

Sample size determination:

Mean:

Proportion:

 

Test of Hypothesis

Null Hypothesis – H_o

Alternate Hypothesis – H₁

Size of Sample – n

Types of Tests – One tailed, Two Tailed, Right tailed, Left tailed

Sign	Type of Test	Keyword to look for
≠	Two tailed Test	Or Not, always, never
<	Left Tailed Test	Higher than, More than, Increased
>	Right Tailed Test	Lower than, Less than, Decreased

Process:

• Formulate the hypothesis
• Set the significance level
• Decide the Test Statistic (z,t)
• Find out the critical value
• 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

Mean

Difference of two mean

Counting 

Proportion

Difference of two Proportions

Calculation of T statistic:

Mean:

Difference in two mean

Difference of two means with dependent samples

Chi Square Test

Interpolation

Extrapolation