What Is a Hockey Stick Chart?
A hockey stick chart is a price line chart that shows abrupt increases post-quiescence or relative stability. A hockey stick-shaped line connects the data points.
Business, economics, and politics use hockey stick charts to show abrupt changes or exponential growth, such as corporate profitability, global temperatures, and poverty data.
Understanding Hockey Stick Charts
A hockey stick has a blade, modest curvature, and a long shaft. A hockey stick chart shows data as low activity (y-axis) for a short time (x-axis), a dramatic inflection point, and a consistent ascent at a steep angle.
The chart is used in medical and environmental science labs. Scientists plot global warming data on a hockey stick graphic. Social scientists know the chart. This shape has identified poverty growth rates.
The hockey stick chart is attention-grabbing. An abrupt and drastic shift in data points from a flat era to a hockey stick chart indicates that causal elements should be a priority. If the data shift occurs quickly, it’s crucial to identify if it’s an aberration or a fundamental change.
Business Hockey Stick Charts Example
Groupon Inc. was one of the fastest-growing firms to reach $1 billion in sales. It did this in two and a half years—half the time of Amazon and Google. Imagine 2008 reporting sales of less than $100K and 2009 revenues of $14.5 million.1Hockey stick chart “blade”
As the hockey stick bends upward, the corporation recorded $312.9 million in sales in 2010. Groupon sold $1.6 billion in 2011. The data shows a hockey stick pattern on a graph with sales on the y-axis and time on the x-axis. No matter how successful the firm appeared, rising revenues did not equal profitability. Selling and marketing costs cost a $413 million net loss in 2010.
Conclusion
- Hockey stick charts show a substantial rise following a flat period.
- Medical and environmental research usually use it. Hockey stick charts show abrupt sales increases in the company.
- Analyze if the sudden increase is permanent or an anomaly.
