Learn how to use ratios and percentages to evaluate numbers in order by putting the size of that number in context.
- So, are you a sports fan? - Yes, I am. - What's your favorite sport? - Actually, I like fly fishing. I find it to be very relaxing out in nature. - Yeah, well, fly fishing is not one of the traditional sports, but I've seen you do it and I confess that you're pretty good. Okay, sports fan. What country won the most medals in the 2016 Rio de Janeiro Summer Olympics? - Well, I don't know for sure, but I would guess it was one of the following: United States, China, or Russia. Or perhaps the United Kingdom. - That's a good guess. Those countries were number one, two, three, and four.
By the way, the UK participates in the Olympics as Great Britain. The difference between those two labels and the reason that it's Great Britain and not the United Kingdom in the Olympics is perhaps a bit beyond the scope of this course. - I agree with that. So, let's keep moving. - Okay, well you might notice something interesting about the list of the top seven countries in terms of 2016 Summer Olympic medal count. In order, they are United States, China, Great Britain, Russia, Germany, France, and Japan. Do you notice anything interesting about this list? - Yes.
What I notice is that there've been lots of trends and changes in the world in the past 70 years since the end of World War II, but the big geo-political picture is exactly the same as it was back then. Of these seven leading Olympic medal countries in 2016, five are the permanent members of the United Nations Security Council. The five leading world powers at the end of World War II. And the other two? Well, they were also prominent back then, as the leaders of the defeated powers, Germany and Japan. So the seven most powerful countries in the world in 1945 are still the seven most powerful in 2016.
At least as measured by number of Olympic medals. - It certainly is interesting what you can learn about the world from just a few numbers. But those countries are also quite large and sent large teams to Rio. Which country won the most medals per citizen? - That's a good question. I actually have no idea. But it certainly makes sense to control for the size of the country. - The winner is Grenada. Grenada won exactly one medal, a silver medal for Kirani James in the men's 400 meter dash. He'd won the gold in London four years before.
This is the equivalent of one medal per 106,825 people, the total population of Grenada. Second place was the Bahamas, and third place was New Zealand, with one medal for every 255,000 people. The United States, with 121 total medals is way down the list, with one medal for every 2.7 million people. Now let me ask you another question. What's the richest country in the world? - Ah, now I understand. I know that the United States has the highest gross domestic product, GDP, with almost 19 trillion in 2016.
But it probably makes sense to look at GDP per person. - [Instructor] Exactly, you have to control for the size of the country. The top five in 2016, according to the International Monetary Fund, were Qatar, 130,000 dollars per person per year, Luxembourg, Macau, Singapore, and Brunei. The United States comes in at number 14 with 2016 GDP of 57,000 dollars per person. - As you can see, when evaluating a number, it is important to put the size of that number in its context.
This is easily done with ratios and percentages.
In this course, join accounting professors Jim and Kay Stice as they help you discover how to leverage the power of numbers to approach businesses problems and make everyday decisions. They explore the power of ratios and percentages, how to monitor and evaluate your budget, how to forecast the timing and amount of a business loan, and much more.
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- Explain the rule of 72.
- Determine net income based on wholesale and retail costs.
- Apply the appropriate methods to convert fractions to percentages.
- Define “consumer price index.”
- Identify the difference between mean and median.
- Recall how to calculate conditional and unconditional probability.