Weighted harmonic mean, Applied Statistics

Weighted Harmonic Mean

Weighted Harmonic Mean is calculated with the help of the following formula:

WHM


2303_weighted harmonic mean.png

Case 1

 

 

Consider a company consisting of only two divisions A and B. The calculation of the net profit margin for the two divisions as well as for the company as a whole is shown below:

 

Division A

Division B

Whole company
(A + B)


Net profits  (Rs. crore)

6

1

7

Sales (Rs. crore)

40

40

80

Net profit margin

15%

2.5%

8.75%                                          


Here we see that the net profit margin for the company as a whole is 8.75% which is nothing but the Simple Arithmetic Mean of the net profit margins of the two divisions A and B.

722_weighted harmonic mean1.png

So the simple arithmetic mean has a significance here. Note that the net profit margins of the two divisions A and B have been calculated with the same denominator (Sales = Rs.40 crore). In general, we can say that the appropriate mean for a set of ratios which have been calculated with the same denominators is the simple arithmetic mean.

 


 

 

 

 

Posted Date: 9/14/2012 2:44:31 AM | Location : United States







Related Discussions:- Weighted harmonic mean, Assignment Help, Ask Question on Weighted harmonic mean, Get Answer, Expert's Help, Weighted harmonic mean Discussions

Write discussion on Weighted harmonic mean
Your posts are moderated
Related Questions
how do i determine the 40th percentile in an ogive graph

solve problems

it is said that management is equivalent to decision making? do you agree? explain

A. Compute descriptive statistics for each stock and the S&P 500. Comment on your results. Which stocks are most volatile?


A researcher is interested in comparing the effectiveness of three different parts of therapy for anger problems. 8 participants are randomly assigned to 3 treatment conditions: Co

I would like to know what the appropriate statistical test is for investigating an association between a nominal variable and an ordinal variable assuming normal distribution? It''

how to analyzePractice-Based Evidence Back to the Future


Root Mean Square Deviation The standard deviation is also called the ROOT MEAN SQUARE DEVIATION. This is because it is the ROOT (Step 4) of the MEAN (Step 3) o