What is the Use of a Pie Chart?

Pie charts are circular graphs that are divided into sections in order to show the percentage of the whole that a category contributes. Pie charts can be found in a variety of contexts from corporations to science labs to personal finance.

Corporate Finance

Corporations are always comparing data over time in order to determine how to minimize costs and maximize profits. A company may create a pie chart of different expense categories to see where its expenditures are going and compare its expenses to those of other companies in the same field. For example, if a company sees that the slice of the pie that represents office space costs is significantly higher for it than its competition, it may look for cost-cutting measures in that category. When examining revenue, a company may create a pie chart for different divisions it has, such as televisions, cameras and computers, to determine which segments are bringing in the largest percentage of the company's profits.

Scientific Research

Scientists work with proportions on a daily basis, and pie charts are an excellent way to visually display this data. An environmental scientist might do a study on an ecosystem and create a pie chart to show how much biomass is concentrated at each stage of the food chain. An industrial scientist may be researching a new alloy for automobiles and find a combination of iron, tin and aluminum is lighter and stronger than existing materials. To show the composition of the new alloy, the scientist could create a pie chart showing the varying percentages of iron, tin and aluminum that make up the material.

Government

Governments must manage the collection and spending of revenue. In order to track the amount of money it is bringing in from different sources, a pie chart would show the percentage of total revenue that was brought in by different income sources, like income tax, corporate tax and capital gains taxes. A pie chart could also be used to show where the money was spent by dividing the pie into proportional pieces for defense, education, Social Security and Medicare spending.

Personal Budgeting

A pie chart can help you plan how you should be spending your money each month. A pie chart that includes allowances for food, housing, fuel, taxes and entertainment will help you better plan your expenditures. For example, if you know you make $1,500 a month, and on your pie chart, you have budgeted 10 percent for entertainment, you know you can only spend $150 on entertainment. You can also alter your values and see how it affects the pie chart. For example, if you make entertainment $200, you can see how much the other categories must decrease to account for this change.

Sports Information

Sports statistics are readily made into proportions. In baseball, a batter's hits can be broken down into a pie chart showing the percentages of the hits that are singles, doubles, triples and home runs. In football, you can create a pie chart to show the percentage of time a quarterback throws to each receiver. In soccer, you can create a pie chart to show the percentage of the game spent in each third of the field.

References

• Using a Pie Chart