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CMA Intermediate · Financial Management and Business Data Analytics · Data Presentation: Visualisation and Graphical Presentation

A company's sales (₹ lakh) over four quarters are 200, 220, 242 and 266.2. An analyst wants a chart in which constant percentage growth appears as a straight line. Which approach achieves this, and what is the quarterly growth rate?

Use a logarithmic y-axis; the growth is 10 percent per quarter. Each quarter's sales are 1.10 times the previous one (220/200, 242/220, 266.2/242). Constant percentage growth is exponential, so it appears as a straight line only on a log scale, while absolute increments are not constant.

  1. ALogarithmic y-axis; growth of 10% per quarterCorrect
  2. BLinear y-axis; growth of 10% per quarter
  3. CLogarithmic y-axis; growth of 20 lakh per quarter
  4. DLinear y-axis; growth of 20 lakh per quarter

Explanation

220/200 = 1.10, 242/220 = 1.10, 266.2/242 = 1.10, so growth is a constant 10%. Constant percentage growth is exponential and plots as a straight line only on a log scale. On a linear axis it curves upward; the absolute increments (20, 22, 24.2) are not constant, so options with 20 lakh are wrong.

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