Pie chart, also known as pie graph, is one of the most commonly used chart by professionals in business, in schools and by journalists. They are not only easy to create and easy to understand but also have a wide variety of use cases where they can be used quite effectively, when used correctly.
Pie chart is a circular graphic used to visualize and compare proportions of categories as parts of the whole. Categories are shown by dividing a circle into segments, where arc length of each segment is proportional to the corresponding numeric data it represents. The entire circle represents sum of all categories, equal to 100%.
Pie chart is an effective data visualization chart to show how individual components contribute to the total and their proportions as part of the whole. For example, how much of total revenue comes from each country.
Here are some broad guidelines for using pie charts effectively;
- Use pie charts when you need to compare no more that 5 – 6 categories. If you have more than 5 – 6 categories, consider using ‘pie of pie’ chart or ‘bar of pie’ chart. (see examples below)
- Use pie charts when the data adds up to 100%.
- Pie chart may not be the best choice if category values are of similar size, as it becomes difficult to distinguish size of each segment and thus proportion of each category as a part of the whole.
- Depending on the analysis findings you are presenting, arrange your data either in ascending or descending order. This makes it easy for audience to read it clockwise or counter clockwise – moving from largest value to smallest value and the other way.
- Use direct data labels. Avoid using legends.
- Pie charts are not recommended when you need to compare category values between two periods or show patterns over time.
Use case example: Revenue sources
Pie chart in this example shows how each individual revenue source contributes to the total revenue, composition and proportions of total revenue generated by an organization during a period through each of the 5 sources – products, services, maintenance, custom development and others.
This high level view of revenue distribution shows; while products contribute 45% to the total revenue, only 27% revenue comes from services. As long as this is in line with the strategy of this organization, the management should be happy with their focus on product revenue. However, if increasing services revenue had been the strategy, they clearly need further analysis to compare it with previous period and if necessary, identify causes of lower revenue from services.
Different revenue sources are shown by dividing a circle into slices proportional to the data value they represent.
How to use and edit this chart template
To edit this chart template, execute following steps.
- Right click on the chart to open chart menu. Click Edit Data. This will open the linked Excel sheet (see video below).
- Enter your data in cells marked in blue color.
- Close the Excel sheet.
- File format: PPTX. Compatible with PowerPoint 2003 and above.