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FMVA: Presentation and Visuals: Chart Choice and Data-Ink Discipline

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Presentation and Visuals: Chart Choice and Data-Ink Discipline

Presentation & Visuals

Output quality decides whether the analysis is used. Two rules generate most questions: choose the chart type from the message, and remove everything that is not carrying information (a high data-ink ratio).

Matching message to chart: time series go to a line; comparison across categories goes to a horizontal bar, sorted by value rather than alphabetically; composition over time goes to a stacked column or area; composition at a single point in time goes to a pie only with five or fewer slices; a bridge from one value to another goes to a waterfall; a range of values across methods goes to a football field. A 3D pie with twelve slices is a reliable wrong answer.

Axis discipline: bar charts must start at zero because the bar's length encodes the value; line charts may use a non-zero axis when the change is the message, but it must be labelled. Truncating a bar chart axis exaggerates differences and is the most common misleading-chart trap.

Finance-deck conventions: state units once in the subtitle or axis label, keep decimals consistent, show negatives in parentheses, and footnote the source on every data page. Write titles as full-sentence takeaways ("Revenue grew 12% on pricing") rather than labels ("Revenue").

Worked example: four valuation methods producing 620-780 per share are best shown as a football field with one bar per method and a vertical line at the current price - the range and the conclusion land in one exhibit, whereas four separate charts communicate nothing.

Rule of thumb: if a reader cannot state the takeaway within five seconds, the exhibit needs a better title, not more data.