What Is the Purpose of a Financial Chart?

A financial chart provides insight into a company's economic robustness.

Financial analysts and accountants express corporate operating data in various formats, including financial tables, statements and charts. Format variety is usually needed to satisfy different users of corporate financial information.

Definition

A financial chart is a graphic representation of a company's financial results. For example, an accountant may display in a chart format percentage increases and decreases for corporate profits over a five-year period.

Types

Types of financial charts vary by user and purpose of analysis. Footprint charts provide price and volume activity on one data point over a month or quarter. Securities traders use bar charts to gauge price changes over a time period. To create line charts, a financial analyst connects a series of data points together.

Purpose

Financial charts are essential for evaluating large volumes of data or comparing two or more sets of data. For example, a financial analyst may compare a stock's price levels by drawing a line chart. Financial market players, such as traders and portfolio managers, also use financial charts in investment activities.

References

• Investopedia: Line Chart
• Investopedia: Point & Figure Chart
• Investopedia: Footprint Charts