Hi,

Well, summer is rapidly drawing to a close here. It was a good one and I spent lots of time outside and with family. Aside from extensive ramblings in Boulder’s flatirons and the canyon, I was also in Yosemite and Sequoia National Parks (wow!) and had trips to both Detroit and Cleveland. But Boulder schools have started up, so even though it’s still August it’s starting to feel a bit like fall.

I hope you’re doing well. I love it when I hear back from you in response to this newsletter, so do let me know how you spent your summer and what’s coming up for this fall.

Best,

David

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Great Colors in Charts

I’ve talked about charts before in this newsletter. We have seen misleading charts as well as bad charts and insights from better ones. Now I want to talk about colors in charts.

I don’t pick colors. I find it paralyzing. How do I choose among 10,000 different paints? I defer to Eleanor for colors now; when I was single I hired a designer to be a color dominatrix of sorts because I couldn’t pick colors for the whole house.

I frequently produce graphs in my work, and Excel will pick colors for me all day long, but the defaults often don’t look good. So how am I to improve a chart like this one below? It’s not straight-out awful, it’s just a bit garish and it distracts from everything else on the page.

Now there’s a solution: mathematically-derived sets of colors. I’ve found two websites with slightly different approaches that, together, have handled all my color-choosing needs recently. First is Color Brewer. Named after Cynthia Brewer, who seems to be the driving force behind it, Color Brewer came out of a National Science Foundation cartography grant from 2001-02. You tell the software how many classes your data has and play with just a few toggles and the software shows you a chart with your colors as well as displaying the technical data for you to use these colors in Excel. Color Picker for Data is even simpler: you choose the number of classes and then drag two ends of a line through a colorscape and see the output off to the side. There are checkboxes to only show colors that are good for color-blind viewers, that are print friendly, etc. Truly, these tools make it easy.

The results:

Ah, that’s better. Just a bit more muted, but still easy enough to tell apart. Certainly reasonable people can differ on aesthetics, but these sites let me make charts that I appreciate. In any case, I hope you enjoy these tools and that together we can rid the world of ugly charts.

Simple Financial Statements Tutorial

This week Ollie (13, and a budding entrepreneur) made a statement that conflated ideas about income statements, balance sheets, and cap tables. I thought he needed a basic tutorial in management accounting, and I found an excellent piece from the SEC called “Beginners’ Guide to Financial Statement.” It’s well-written and succinct.

The first 3 ½ pages tell you all you need to know. It’s encouraging: “If you can read a nutrition label or a baseball box score, you can learn to read basic financial statements. If you can follow a recipe or apply for a loan, you can learn basic accounting.”

Highly recommended.