April 2019 Paper 2

[rlsrachaellouisesmith]

Good morning
I just wondered if you can give any guidance on how to plot charts of cashflows.
- If there are just a few cashflows to show then a bar chart seems sensible
- if there is a larger number of cashflows a line chart with markers would seem sensible
Originally I tried to use a bar chart always as the cashflows are discrete not continuous, however they can look very messy when lots of cashflows or multiple cashflow scenarios to compare.
Do you have any suggestions of when to use each type, or will a line chart or bar chart be acceptable if asked to chart cashflows?
Thank you,
Rachael

 

[ntickner]

I tend to suggest that where you're charting something that changes over time, you use a line graph. This shows that there's a relationship between the items. Where you're charting something in categories, or comparing discrete elements, then use a bar chart.

So if you've got monthly cashflows over time: line graph.
If you've got one or two of some different types of cashflows (say, Premium, claim, expense, inv return, etc), then a bar chart might be better.

 

[rlsrachaellouisesmith]

Thank you, very helpful response!