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Line Chart
lain chaart
A line chart is a graph in which data points are connected by lines. It is commonly used to show how a value changes over time.
Usually:
- The X-axis shows time, such as days, months, or years.
- The Y-axis shows the value being measured, such as sales, prices, revenue, or returns.
Line charts make it easier to spot trends, rises, falls, and fluctuations. In finance, they are commonly used to track share prices, market indices, revenue, profits, interest rates, and other data over time.
Tracking Monthly Sales
An Indian online retailer wants to understand how its sales changed during the year.
Its monthly sales were:
January: ₹50 lakh
February: ₹65 lakh
March: ₹70 lakh
...
November: ₹1.2 crore
The company plots the months on the X-axis and sales on the Y-axis.
The line chart shows that sales generally increased through the year, with a sharp rise during the festive season. This helps the company quickly identify stronger and weaker sales periods and plan inventory and promotions accordingly.
The earliest recorded use of the line chart is attributed to William Playfair, a Scottish engineer and political economist, in 1786. He published "The Commercial and Political Atlas," which included the first known line charts to illustrate economic data such as imports and exports of England. This laid the foundation for modern-day statistical visualization.
Definition
A line chart is a graph in which data points are connected by lines. It is commonly used to show how a value changes over time.
Usually:
- The X-axis shows time, such as days, months, or years.
- The Y-axis shows the value being measured, such as sales, prices, revenue, or returns.
Line charts make it easier to spot trends, rises, falls, and fluctuations. In finance, they are commonly used to track share prices, market indices, revenue, profits, interest rates, and other data over time.
Case Study
Tracking Monthly Sales
An Indian online retailer wants to understand how its sales changed during the year.
Its monthly sales were:
January: ₹50 lakh
February: ₹65 lakh
March: ₹70 lakh
...
November: ₹1.2 crore
The company plots the months on the X-axis and sales on the Y-axis.
The line chart shows that sales generally increased through the year, with a sharp rise during the festive season. This helps the company quickly identify stronger and weaker sales periods and plan inventory and promotions accordingly.
Historical Reference
The earliest recorded use of the line chart is attributed to William Playfair, a Scottish engineer and political economist, in 1786. He published "The Commercial and Political Atlas," which included the first known line charts to illustrate economic data such as imports and exports of England. This laid the foundation for modern-day statistical visualization.