# Absolute and relative magnitude

In economic science, statistical disciplinesare in priority positions. This is due to various reasons. First of all, in the framework of general economic specialties, statistical research serves as a basis for the development and improvement of analytical methods. In addition, they are an independent direction, having its own subject.

## Absolute and relative values

These concepts act as key elements in thestatistical science. They are used to determine the quantitative characteristics, the dynamics of their change. Absolute and relative values reflect different characteristics, but without some, there can not be others. The former express the quantitative dimensions of a phenomenon without regard to others. On them it is impossible to estimate the occurring changes and deviations. They express the volume and level of the process or phenomenon. Absolute values are always named numbers. They have a dimension or a unit of measurement. They can be natural, labor, money and so on. For example, the norm-hours, pcs., Thousand rubles. and so on. The average and relative values, on the contrary, express the ratio of several exact dimensions. It can be established for several phenomena or for one, but taken in a different volume and in a different period. These elements act as a quotient of statistical numbers, which characterizes their quantitative relationship. To determine relative values, one size must be divided into another, accepted as the base one. The latter can be planned data, actual information from previous years or another enterprise, and so on. The relative value of the comparison can be expressed as a percentage (with a base taken as 100) or as coefficients (if base is one).

## Classification of statistical numbers

Absolute values are presented in two types:

- Individual. They characterize the size of the trait in specific units. For example, it can be the salary of an employee, a deposit in a bank, and so on. These dimensions are found directly in the course of statistical observation. They are recorded in the primary accounting records.
- Total. Values of this type reflect the total indicator of the characteristic for the totality of objects. These dimensions act as the sum of the number of units (population size) or the volume of the variable characteristic.

## Units

Natural absolute values can besimple. This, for example, tons, liters, rubles, pieces, kilometers. They can also be complex, characterize a combination of several quantities. For example, in the statistics, tonne-kilometers are used to establish the freight turnover of the railway transport, kilowatt-hours to estimate the production of electricity and so on. In research, conditionally-natural units are also used. For example, a tractor fleet can be recalculated into standard cars. Value units are used to characterize a heterogeneous commodity in monetary terms. This form, in particular, is used in assessing the income of the population, the gross output. Using value units, statisticians take into account the dynamics of prices over time, and overcome the disadvantage due to "comparable" or "unchanged" prices for the same period. Labor values take into account the overall costs of work, the labor intensity of certain operations that make up the technological cycle. They are expressed in man-days, man-hours and so on.

## Relative values

The main condition for their calculation is thethe comparability of units and the existence of a real connection between the phenomena under investigation. The value with which the comparison is made (the denominator in fractions) appears, as a rule, as the basis or basis of the relationship. Depending on its choice, the result can be expressed in different parts of unity. It can be tenths, hundredths (percentages), thousandth (10th part% - per mille), ten thousandths (one hundredth percent - prodecimille). The units that are to be compared can be either single-sided or heteronymous. In the second case, their names are formed from the units used (q / ha, rubles / person, etc.).

## Types of Relative Values

In statistics, several types of these units are used. So, there is a relative value:

- Structures.
- Scheduled task.
- Intensity.
- Dynamics.
- Coordination.
- Comparisons.
- Degrees of economic development.

The relative value of the job expresses the ratioplanned for the forthcoming period to actually existing for the current period. Similarly, a plan unit is calculated. Relative value of the structure is a characteristic of the share of specific parts of the studied population in its total volume. Their calculation is carried out by dividing the number in separate parts by the total number (or volume). These units are expressed as a percentage or a simple multiple ratio. For example, this is how the share of the urban population is calculated.

## Dynamics

The relative value reflects in this casethe ratio of the level of the object in a particular period to its status in the past tense. In other words, the change in the phenomenon during any period is characterized. The relative magnitude that characterizes dynamics is called the rate of growth. The choice of the base for the calculation is carried out depending on the purpose of the study.

## Intensity

The relative value may reflect the degreethe development of a phenomenon in a particular environment. In this case we speak of intensity. Their calculation is performed by comparing the opposite quantities, which are in communication with each other. They are installed, as a rule, per 1000, 100 and so on units of the population under study. For example, per 100 hectares of land, per thousand people and so on. These relative values are named numbers. For example, this is how the population density is calculated. It is expressed by the average number of citizens per 1 sq. Km. km of the territory. The characteristics of the degree of economic development serve as a subtype of such units. For example, they include such types of relative values as GNP, GDP, VID, and so on. per capita. These characteristics play an important role in analyzing the economic situation in the country.

## Coordination

The relative values cancharacterize the proportionality of the individual elements of the whole to each other. The calculation is carried out by dividing one part into another. Relative values in this case act as a subtype of intensity units. The difference is that they reflect the level of distribution of dissimilar parts of one set. The basis may be one or another feature, depending on the goal. In this connection, several relative coordination values can be calculated for the same whole.

## Comparison

Relative values of comparison are units,which are separate subdivisions of the same statistical characteristics that act as characteristics for different objects, but refer to a single moment or period. For example, the ratio of the cost level of a particular type of product produced by two enterprises, labor productivity for different industries, and so on is calculated.

## Economic evaluation

In this study,absolute and relative units. The former are used to establish the ratio of reserves and costs to sources of financing and to assess the enterprise by the level of monetary stability. Relative indicators reflect the structure of funds with the state of fixed and working capital. Economic evaluation uses horizontal analysis. As the most general absolute value, characterizing the financial stability of the company, there is a shortage or surplus of sources of financing of costs and stocks. The calculation is done by subtraction. The result is a difference in the size of sources (minus non-current assets), with the resources of which inventories are formed, and their quantity. The key elements in this are the following statistical units:

- Own current assets.
- The total indicator of planned sources.
- Long-term borrowed funds and own funds.

## Deterministic Factor Study

This analysis is a specificmethod of studying the impact of factors, the interaction of which with the results has a functional character. This study is carried out by the creation and evaluation of deterministic models. In this analysis, relative indicators are widely used. In most cases, multiplicative models are used in factor analysis. For example, the profit can be expressed by the product of the quantity of goods per unit cost. Part of the analysis in this case is conducted in 2 ways:

- The absolute difference method assumes a chainsubstitution. The change in the result due to the factor is calculated as the product of the deviation of the studied trait to the base of the other in the selected sequence.
- The method of relative differences is used when measuring the effect of factors on the increase in the result. It is applied when the initial data contains the previously calculated deviations in percent.

## Dynamic series

They represent a change in the numericalindicators of social phenomena over time. As one of the most important directions in this analysis is the study of the features of the development of events for specific periods. Among them:

- Rates of growth. This is a relative indicator, which is calculated by dividing the two levels in one row on top of each other. They can be calculated as chain or as basic. In the first case, the comparison of each level of the series with the preceding one is made. In the second case, the base is selected. All levels in the series are compared with one that acts as the basis. Growth rates are expressed in terms of coefficients or percentages.
- Absolute increase. It is the difference between the two levels of the dynamic series. Depending on the method of choice of the base, it is basic and chain. This indicator has the same dimension as the levels of the series.
- Rates of growth. This relative indicator reflects the amount of interest that one level of the dynamic series is greater / less than the other, which is taken as the base.

## Conclusion

Undoubtedly, the relative quantities possesshigh scientific value. However, in practice they can not be used apart. They are always in interrelation with absolute indicators, expressing the relations of the latter. If this is not taken into account, it is impossible to accurately characterize the phenomena under investigation. Using relative values, it is necessary to show which particular absolute units are hidden behind them. Otherwise, you can draw wrong conclusions. Only the comprehensive use of relative and absolute values can act as an important means of information and analysis in the study of various phenomena occurring in socio-economic life. In general, the transition to the calculation of deviations allows us to compare the economic potential and the result of the activity of enterprises that differ significantly in terms of the resources used or other characteristics. Relative values, in addition, can smooth out some processes (force majeure, inflation, etc.), which can distort the absolute units in the financial statements.

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