Although many types of graphs exist, bar charts are the most common type used to display trends in financial data. (Pie charts are used primarily to show the relative size of subcomponents, such as the proportion of product cost due to labor, materials, and overhead).Therefore, we will focus on some basic principles that make bar charts easy to read.
1. Use titles that summarize the basic message.
2. Include data values with each element instead of labeling the vertical axis, to facilitate mental calculations and analyses.
3. Use 2-D, instead of 3-D, bars because that makes it easier to accurately assess the magnitude of changes and trends.
4. Use different shades of gray or colors instead of patterns of dots or stripes to represent different variables because they are easier to distinguish.