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Graphing Data For Investors


There’s a fine line between illustrations that exist for their own sake and illustrations that usefully show key concepts. To keep from drawing cartoons, it’s important to start with the concept that is being illustrated, and build the graphic around it. IR Smartt is going to look at several common concepts that public companies try to get across to investors, and some common graphic outlines that illustrate them well. Graphing data for investors isn’t always easy, but hopefully these tips give you a starting point.

Scatter Plots

Good businesses differentiate themselves from the competition on multiple fronts. So long as those fronts are quantifiable, the differentiation often looks terrific on a scatter plot, where the position on the x and y axis are linear quantities of the respective values of the areas in which you’re competing.

How to Make It Look Good

  • Make sure labels are visible. These are busy by nature, so they’re tough to label. Just because the outlier is easy to find doesn’t mean you get to ignore the pack. A legend helps you sort these out.
  • Try not to clutter it up. Scatter plots are used to show a great deal of data in a small space, so the tendency is to get sloppy. Take advantage of small efficiencies like trim labels and thin borders on bubbles to keep it looking clean.

operational data scatter plot

The Timeline

Investors want to know what to expect and when to expect it. Company management has been hired to implement a plan. Often, that plan is long and full of contingencies, but it will exist as an order of events on a scale, even if it’s not stuck to a specific calendar. Showing projects on timelines helps to show investors how management envisions the company’s asset and operations growth, and reinforces the idea that the company is pragmatic and properly organized.

How to Make It Look Good

  • Show standard intervals. Just because events happen far apart is no excuse to cut a low-news year out of the timeline all together.
  • Use neutral tones and highlights. Avoid strong colors in your timeline itself and save these for highlighting data points along the way.

Multiple Line Graphs

This is an old standard because it works. Prices, sales volumes, and any other values that fluctuate over periods of time and are counted with enough frequency over the relevant period to be plotted in a line graph are displayed that way because it’s how we’re used to seeing it. Importantly, a reader can get a sense of the trending direction at a glance; the most rudimentary separation of signal from noise.

Be careful not to use line charts if you don’t have enough linear data points! For example, if you’re graphing EBITDA numbers over 4 quarters (4 points of data from left to right), use four bars instead of a line. Line graphs are especially useful when comparing trends.

How To Make It Look Good

  • Keep it to a maximum of four lines.  More than that starts to become too busy. If you legitimately have six relevant data sets, consider making 2 line graphs of 3 each.
  • Label the lines directly. A reader piecing their way through a line chart with a color legend may as well be using a decoder ring from a cereal box. Label the lines at their end points, horizontally.
  • Start with a zero baseline. Resist the terrible compulsion that leads people to make the baseline whatever they think is the lowest relevant number. Zero baselines are universal.


The Bar Graph

Close cousin of the line graph, the multiple bar graph is a better option when graphing fewer individual points of data. The bar graph is often the best way to illustrate operational data. It’s also useful for showing the differences between similar or related metrics over multiple periods. For example; showing GAAP earnings vs. non-GAAP earnings on multiple bars across quarters could be an effective illustration of the reason the company uses non-GAAP earnings as an indicator. One could also throw in an adjusted GAAP earnings bar for periods in which earnings previously un-bookable by GAAP standards bring the GAAP number in closer line with reality the non-GAAP metric.

How To Make It Look Good

  • Space them right. Use ½ of the width of the individual bars worth of blank space in between the bar units.
  • Avoid rainbows. The sets are already separated into bars. Further separation is jarring. This is cruical on operational data graphs.
  • Limit Head Tilts. Label vertical bars horizontally, and horizontal bars vertically. In other words: Make it read left-to-right, not sideways.


Still want more?

for details on how to use these charts effectively to communicate your investment story to investors, check out our latest E-book (published just yesterday) which details the impact of data visualization on investors.

data visualization wins investors

Tim Howard

Tim is our CEO at IR Smartt Inc. He leads the strategy and business development teams, driving the company forward. Tim's previous professional experience included extensive work in Journalism and Online Publishing.