Data Viz Done Right

July 15, 2017

A New Way to Visualize an Income Statement

18 comments
Thursday, as Eva and I were preparing for our next BrightTALK webinar (How data visualization can deliver clearer insights for the Finance industry) we were looking for examples of good finance dashboards. We found a page on Tableau's website with finance dashboards...great! So we thought.

Scroll down on the page and you see a series of examples. I clicked on the first one titled "Track profit and loss with an intuitive CFO dashboard". Yes! Had we found the Holy Grail? Turns out these are for the most part Excel dashboards rebuilt in Tableau, which is sadly how many finance departments choose to use Tableau. Take pity on them I say. Let's have a look at what Tableau created:


Keep in mind, this is billed as an "intuitive dashboard", but is it really? Normally when I write about makeovers, I list out the things that work well. With this dashboard, I can't think of a single thing that works well. Ok, maybe the title is clear and the filters are obvious. I don't see anything else that is even remotely intuitive otherwise.

Let's look at the viz in two separate pieces.

STACKED BAR/DUAL AXIS CHART

Generally I'm not a fan of dual axis charts that have different measures. I think these confuse the audience more than necessary, which defeats the purpose of using visuals to convey the information in the first place. In my experience, when people see a dual axis chart, they naturally look for correlations where they may not exist.

What else fails?

  • The way this chart is designed, it's too much work to know which axis goes with which metric.
  • Why use a dot plot when this is a time series? Wouldn't a line look better?
  • Why are there separate summaries for the years? When you first look at the top section, your eyes go all the way across before you realize you're now looking at a yearly summary. Poor design.
  • Why the heck is the Profit Margin legend so weirdly aligned?
  • Net profit is stacked in front of net sales. I get that, but then I have to do that math in my head for the difference. Why not just express it as a profit ratio, making it much more intuitive?
  • The dashboard is set to automatic size, which is never, ever a good choice. 

FINANCE TABLES

Tables in Tableau annoy me probably more than anything else. Yes, I understand people like tables, especially finance people. However, we all know that all they want to do is copy/paste it into Excel. Just give it to them in Excel if that's what they want.

What's wrong with this table?

  • The table doesn't align with the bar charts.
  • Again, they provided a separate yearly summary way off to the right. Why aren't the year totals after each year? 
  • I have to scroll to see all of the data in the table.
  • There are way too many metrics. Breaking down COGS and OPEX into all of its parts is completely unnecessary.
  • There are absolutely zero actions you can take from the table. It doesn't tell you anything about what's going well nor what needs attention.

I decided to spend some time making this over and creating an intuitive, actionable income statement. I drew inspiration from Lindsey Poulter's DC Metro scorecard to create my design. In my version I take each of the nine metrics that make up the income statement and create a "card" for each of them. Thank you to Tim Ngwena for the idea to add subtle borders around them. 

Overall, the desktop and tablet versions are designed to be read in a Z-pattern, while the mobile version is designed for scrolling (see the video below).

How to read each card:

  1. YTD vs. PY Bullet Graph - The bar chart represents YTD for the given metric and the reference line represented the same period of the prior year (PY). The bar is then colored based on the variance to PY. Blue is good, orange is bad. For some of the metrics, being beyond PY is good, like Gross Sales. However, for other metrics like COGS, being above PY is bad. Hence why you see some bars orange that extend beyond PY.
  2. Variance to Budget Sparklines - Below each bar chart is a sparkline that goes back to January of PY. In this case, the sparklines represent 17 months. As new data comes in, the line grows. The sparklines show the variance to the budget for each metric. A reference line at zero represents being "on budget". The dot on the end of each line is color by the variance to the budget for the most recent month.

With that, I'd like to introduce you to a much more actionable, much more intuitive income statement. Below this image is a video of the mobile version. Click on the image for the interactive version. If you are reading this on a mobile device, you should see the mobile version automatically. Device Designer made this super simple!

I also would like to thank Adam Crahen, Pooja Gandhi, Curtis Harris, Michael Mixon, Eva Murray and the entire Information Lab team for their quick feedback on this yesterday. It's very much appreciated!!


VIDEO OF MOBILE VERSION



18 comments :

  1. This is one of the best practical usage conversion I have seen. Great way of representing the financial metrics in one pager. Most of the team within fiance always emphasizes on showing the number. They always miss the point that if you have a chart then you want need to have table again for this part. Challenge is its used more as a report building tool that dashboard for actual inference. Too many numbers spoil the overall objective. High time we differentiate between report and dashboard. This is really a good post Andy, perfect as always.

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  2. This turned out great, Andy! Appreciate the thorough walk through the before and after and your reasoning behind it, too

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  3. Andy: I think this looks terrific and that I get the overall picture at the first glance. One thing that confuses me is if the line on the bullet graphs is supposed to represent the goal? If so, then why are all the bars on the bullet graph past the goal but some of them are orange which means "goal not met" while others are blue, which means the goal is met. If the line is the goal then it looks like we've beat it on the measures.
    Thanks, Bruce

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  4. Andy: Okay I downloaded your workbook from Tableau Public and figured out why I was confused. Two reasons: 1. The color scales for the bars are continuous diverging, and some of the positive values that aren't far from a 0% YoY difference are orange. (I saw you had considered a stepped scale and tweaked them to a 9 point stepped scale which makes the values close to 0% YoY change grey rather than orange.) And 2. Some of the measures are for income (revenue, profit, sales) and are supposed to exceed the goal, while others are costs (Discounts, COGS, Taxes) and are supposed to stay below the goal. Income and Cost measures are interchanged. I wonder if they were group together, with a heading if that make make it clearer that the cost measures are supposed to be under the goal.

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  5. Great work Andy. As a CFO of a community health center, I have been looking for an alternative dashboard presentation for my three basic financial statements -- balance sheet, income statement, and cash flows. Any thoughts on the best presentation of cash flow?

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    1. Thanks Cody! I'm looking to build out more finance dashboards and a cash flow statement would be perfect. Do you know of any sample data sources? Is this something that can be pulled off a company's website perhaps in their earnings statements?

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    2. You will find many of these. For instance try luxottica (http://www.luxottica.com/en/annual-financial-report-2016-0) pages 190-191.

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    3. Andy you can go to any of the Company's Investor relations link and download the excel version of the P&L, Balance Sheet & CashFlows. You can also go to yahoo finance, Reuters or Bloomberg to get the data as well.

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  6. But what if you need to see OPEX and COGS segmented like that? I guess I don't understand the criticism there if that's what they want to see. They're the ones looking at it after all.

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    1. Fair point Barry. In that case, I would have more cards.

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  7. Amazing insights. Thanks for sharing.

    Br / Burhan (@patternproject)

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  8. Definitely interesting. As a finance user I would suggest to mix absolute and % measures (eg discounts in%) in order to provide some insigths on volume, price and cost trends (in this example turnover Gross Sales grow by 14% and discounts by 12% - message should be positive). I would also think of fluid way to move to categories or regions to gather insights on where the growth is coming from (menu filter? long dashboard?). Finally, I would include a 'way out' to a table with fully segmented information.
    Amazing the mobile version!

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  9. Perfect example of a dashboard built by somebody with good tableau but limited finance knowledge. If we would not like to see connections between the different metrics, these graphs can be enjoyable.
    I prefer the original version you found on Tableau website

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    1. Good thinking. I think the issue can be solved by creating additional viz to show the connections between metrics like you mentioned above. Would love to hear your thoughts.

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  10. Great work Andy! I really love the look and feel and of the income statement! I see that as being one helluva template for a tiered KPI dashboard as well...take a few top level KPIS and provide tiers for the difference dimensions you slice by. Thanks as always for sharing!

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  11. This is great and thanks Andy! Where can I download the data to follow the video, please?

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    1. If you click on the link above for the interactive version, you can then download the workbook and unzip it to get the data.

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