Descriptive analytics is the interpretation of historical data to better understand changes that have happened in a business. Descriptive analytics describes the past using a range of data to draw comparisons. Most commonly reported financial metrics are a product of descriptive analytics, e.g., year-over-year pricing changes, month-over-month sales growth, the number of users, or the total revenue per subscriber. These all describe what has occurred in the business in the time period being measured.
Descriptive analytics is meant to provide an accurate picture of what has happened in a business and how that differs from other comparable periods. These performance metrics can be used to flag areas of strength and weakness in order to inform management’s strategy.
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