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Business Definition for: arithmetic mean
Dictionary of Accounting Terms
arithmetic mean
See also mean
Dictionary of Finance and Investment Terms
arithmetic mean

simple average obtained by dividing the sum of two or more items by the number of items.

Dictionary of Business Terms
arithmetic mean

average obtained by dividing the sum of two or more items by the number of items.

Related Terms:
mean

measure of central tendency; also called average. Mean and standard deviation are the two most widely used statistical measures that summarize the characteristics of the data. Suppose a new car dealer sells 630 cars during a 30-day period. Then the mean (average) daily sales is obtained by dividing the total number of cars by the number of days as follows:

Mean daily sales per day = 630/30 = 21 per day

Symbolically,

where x = the mean, xi = the values in the data, ? (read as sigma) is the summation sign, and n = the number of observations in the data.

Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.
 Copyright © 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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