Research & Financial Data
Business: Edexcel GCSE, topic 2.4.6
Qualitative and Quantitative Research
Qualitative and quantitative research can give a business data to support, inform and justify business decisions.
Qualitative research
- Qualitative research generally collects information about opinions and views rather than things that can be quantified (put into numbers).
- For example, research into whether customers think the customer service at Waitrose is good is qualitative research.
Quantitative research
- Quantitative research collects factual information on things that can be quantified (put into numbers) and recorded easily.
- For example, research into the number of Ford Focus cars sold in the UK last year is quantitative research. It is not based on an opinion, but is based on statistics/data.
Financial Data
Financial data is quantitative data that contains information about the financial performance and financial position of a firm. The financial statements published by firms and internal data about sales and profits are examples of financial data. The uses of financial data include:
Internal performance assessment
- Financial data can be used by internal management to assess the financial performance of a firm.
- Financial data is useful in spotting when the firm is not doing well and getting to the bottom of why it is not doing well.
- Business managers can use the financial data to spot trends and see if the firm is growing and becoming more or less profitable.
Investor assessment
- Financial data can be used by potential investors to see if it is worth investing in the business.
Competitor assessment
- Financial data can be used to compare a firm’s performance to the performance of their competitors.
- This gives a benchmark of how the firm should be performing compared to how they are actually performing.
Limitations of financial data
- Financial data is not as factual as it might seem. Sometimes it is based on people’s judgment or computer modelling.
- Financial data may only give a snapshot of financial performance at one point in time. This can be misleading as it may not take into account external factors or competitors’ behaviour.
- Looking only at one firm’s financial data does not always give a good idea of that firm’s performance.
Test yourself on Research & Financial Data
Which of these data sets would be obtained from quantitative research?
Data is collected on a company's percentage growth. What type of research is this?
How does data from research affect companies decisions?
Usually, what type of data is financial data?