In Finance, we do a lot of analysis. Most is built on statistics, but do you know statistics? Here's a simple glossary of statistics that you can use to enrich the analysis you're doing... It reminded me of an analysis I once did and probably the coolest time I used statistics in my career. We had a situation where labor costs were increasing faster than we could increase the revenue in one of our major contracts. However, we didn't have a good understanding of the relationship between the development in contract rates in the market and the development in labor costs. As a result, we were not effective when negotiating contracts with our clients and our margins always ended up eroding over time. To solve this and help inform the commercial team to make better pricing decisions, I did a correlation study between contract rates in the market and the development in the central labor index. The results weren't too surprising but it was still cool to see how a correlation analysis could help device the best possible escalation clauses in a contract. I found that in the short run there was little correlation between rates and labor costs but in the long run the correlation was high. Knowing this we could now calculate the variance on the labor cost and suggest a quite exact multiplier we would need in the contracts for them to remain profitable over time. The commercial team used these insights in ongoing negotiations for two new contracts and managed to secure an additional $5M in revenue. Now if you thought statistics was boring all you need to do is re-read this example and take the simple glossary to heart! How are you using statistics in your work?