Use Median Over Mean

Why use Median over Mean?

For financial analysis, analytics, and annual planning, median values are often preferred over mean (or average) calculations because of their higher accuracy and reliability. Median values rely on the midpoint of data points rather than an average value across the board, making them less susceptible to outliers. This allows any analysis to be more accurate and reliable over time than using mean calculations, which can be complicated and cause distortion due to extreme values.

Here are the top 5 reasons to use Median instead of Mean!

1. Median values are less susceptible to outliers, which makes your analysis more accurate and reliable over time.

2. Median calculations are less complicated than mean calculations, making them easier to use in the long run.

3. Median values make it easier to identify when a company is experiencing significant growth or decline since they rely on the midpoint of data points instead of an average value across the board.

4. Medians provide a better indication of overall trends without distorting reality due to outliers with extremely high or low results compared to other values within the dataset.

5. It is easier for decision-makers to understand median values because they indicate the “middle ground” between high and low values.