Hockey Stick Chart

What Is a Hockey Stick Chart?

A hockey stick chart is a price line chart in which a sharp increase happens suddenly after a short period of quiet or relative stability. The line interfacing the data points in this manner looks like a hockey stick.

Hockey stick charts have been referred to in the world of business, economics, and policy as a visual gadget to illustrate sensational shifts or hazardous growth, for example, with corporate earnings, global temperatures, and poverty statistics.

Understanding Hockey Stick Charts

A hockey stick is comprised of a cutting edge, a small curve, and a long shaft. A hockey stick chart shows data as low-level activity (y-pivot) over a short period of time (x-hub), then a sudden curve indicative of a inflection point, lastly a long and straight rise at a lofty point.

The chart is normally seen in science labs, like in the field of medication or environmental studies. Researchers, for instance, have plotted global warming data on a chart that follows a hockey stick pattern. Social researchers are additionally acquainted with the chart. A few perceptions about the rate of increase in poverty have been depicted by this shape.

The hockey stick chart can command immediate consideration. A sudden and sensational shift toward data points from a flat period to what is noticeable in a hockey stick chart is an obvious sign that more center ought to be given to causative factors. In the event that the data shift happens throughout a short time span, it is important to decide whether the shift is a deviation or on the other hand on the off chance that it addresses a fundamental change.

Business Example of a Hockey Stick Chart

Groupon Inc. has the differentiation of being perhaps of the quickest developing company in business history to accomplish the $1 billion in sales mark. It achieved this accomplishment in around more than two years, which is half the hour of other tech hotshots like Amazon and Google. Put in an unexpected way, envision logging sales of under $100K in 2008 and afterward seeing $14.5 million in incomes in 2009. This is the "cutting edge" part of the hockey stick chart.

In 2010 the company reported sales of $312.9 million, addressing the vertical curve or inflection point of the hockey stick. Then, at that point, in 2011, Groupon generated an astounding $1.6 billion in sales. Plotted visually on a graph with sales on the y-hub and time on the x-pivot, the data plainly illustrates a hockey stick pattern. Nonetheless, as fruitful as the company might have appeared at that point, the taking off incomes didn't mean it was beneficial. As a matter of fact, net losses in 2010 were $413 million due to selling and marketing expenses.

Features

• It is important to dissect whether the sudden increase is a permanent state of affairs or a deviation.
• It is generally seen in logical research measuring medical outcomes or environmental studies. In instances of business sales, a hockey stick chart is addressed by a sudden and emotional increase in sales.
• A hockey stick chart is a chart portrayed by a sharp increase after a relatively flat and quiet period.