From the course: Corporate Finance: Profitability in a Financial Downturn
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Cleaning your numbers
From the course: Corporate Finance: Profitability in a Financial Downturn
Cleaning your numbers
- Have you ever heard the phrase garbage in, garbage out? Well, this is what happens if you try to analyze data that's dirty. And it's why you need to make sure that your data is clean. What does it mean to have clean data? Well, it means that your units of measure are consistent. If you're looking at currencies you need to make sure that stuff that should be in dollars is in dollars and stuff that's in euros should be in euros. If things are metric, like centimeters or meters, that's fine, but if some of the data's in feet you're going to need to do a conversion and make sure that the data aligns. Other areas where you can have problems can be in misreported data that's in the wrong category or missing data. Without making sure that your data units are right, the currencies are right, that data's in the right columns, that they're categorized correctly, you're not going to do the best analysis possible. You need clean…
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