Reviewed by Oct 05, 2020| Updated on
A bar graph is a chart that displays data in the form of rectangular bars or columns (called bins), showing the total amount of observations in the data pertaining to that category.
Bar charts may be shown with vertical columns, horizontal bars, comparative bars (multiple bars to show a value comparison), or stacked bars (bars contain multiple information types).
Bar graphs are widely used for presenting data in financial analysis. A stock volume diagram is a type of vertical bar graph widely used.
The objective of a bar graph is to quickly convey relational information as the bars display the quantity for a given category. The bar graph's vertical axis is called the y-axis, while the horizontal axis is the x-axis.
The length of the bars/columns determines the value as described on the y-axis when interpreting a bar graph. The x-axis may be any variable, such as time or the calculated category, such as earnings per share ( EPS), income, and/or cash flow.
A standard bar graph is marked with a label or description, x-axis, y-axis, axis scales or percentages, and lines. Some graphs may also have a legend defining what different colours mean, for instance in a stacked bar graph.
Bar graphs are perfect for comparing two or more values over time. Data is shown either vertically or horizontally. Within a category, single bar graphs are used to express discrete values of an element.
For example, for different ages, a bar graph might show the number of males with some trait. The discrete value, or the number of instances where a person has some characteristic, is expressed by varying the bar length. More instances mean a longer bar, and a shorter bar means fewer instances. With each age or age group, a different bar is set in this example.