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Weighted Harmonic Mean
Weighted Harmonic Mean is calculated with the help of the following formula:
WHM
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
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.
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.
A. Do the correlation matrix table. B. Which variable (s) has the largest correlation coeffieient which is not a perfect correlation? C. Which variable (s) has the s
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