A chart is supposed to take all of your important information and put it into one, easy-to-read form. If you have an overwhelming amount of hard-hitting information, but no way to show it effectively, your point can be lost on your audience.... 

If your business' profit just skyrocketed in the last year and your chart doesn't show this at a glance, it may not be effective at all, and ultimately, all the time you spent preparing for and giving your presentation has been wasted. When creating a chart, there are three important questions you must ask yourself.

Is the chart type appropriate for my data?

Are all elements clearly labeled?

Does the design distract or confuse my audience?

Here, we'll explore the different chart types and answer these questions so you can create what's considered a good chart to get your point and data across effectively.

Did I use the right chart?

Most likely, if you don't understand the data on your chart or how to read it, your audience will be equally confused.  Don't get carried away with fancy charts just because you think they might look better.  A chart that is clear, and accurate, will always do the job better than a chart that looks great, but is confusing or misleading. 

In order to guarantee that your chart is effective, you first need to check if the format you chose is appropriate for your data.

Columns, bars, or pie charts are generally a safe bet.  They're easy to decipher and people are familiar with reading them. They are great for showing differences in size or growth.

However, when using a pie chart, be careful.  Microsoft® Office Excel® will allow for functions that are irrelevant with that chart type, including plotting negative values. Pie charts are useful for showing how a total value, such as budget forecasts, breaks down into categories, but not for showing changes or comparisons.

Did I clearly label all my elements?

For your audience to be able to read your chart at a glance, all the parts need to be labeled clearly and concisely.  The three main parts of a chart are the

Headline: should be descriptive and should not cause the audience to guess what the chart is going to be about. 

Example: if you're talking about XYZ Company's profits for the year 2007, you wouldn't just write “Profits” as the headline.  You would write "XYZ Company Annual Profits for 2007".

Data: should be accurate so as to not mislead the audience.

Legend:  should either be color coded or use symbols to differentiate between the data being shown.

 
Is my design or color palette distracting?

Data can be enhanced with data graphics and a pleasing yet still readable color palette. A data graphic presents your data as a combination of textual and visual elements, such as flags and progress bars and enhances your data by applying shapes to show data that the shape contains.

To ensure that your color palette doesn't take away from the overall information of your data, stay away from bright colors that distract the eye and are hard to read.  Typical colors that are successful and easy to read are shades of blue, orange, green, black, or red.  Learn how you can print your graphs clearly in color or black and white helping you ensure even more success.  
 
The good the bad and the just okay

Some graphs can be disguised as good, but they are actually either misleading or just plain nonsense.

Misleading Chart:  Even if data is accurate, a chart that misleads can cause data too look much more or less impressive than it really is.

Tip: Take a step back and see if the chart is explaining the exact point you are trying to make. For example, if your sales figures are showing only an increase of 1% (which to you is not a lot) and your y-axis is set at a default that looks zoomed in too closely, you could be creating a visual story that your sales figures are higher than they actually are. View an example of a misleading visual based on y-axis figures not set to show the bigger picture. To update this view (in Excel 2007) use axes tools on Chart tools / Layout tab. On the y-axis, set the minimum value to a more appropriate one.

Nonsense Chart: Even if a chart was easy to create, if it doesn't make sense or is irrelevant, your chart is classified as a nonsense chart.

Remember what makes a successful chart

Good Chart:  A chart is classified as good if it is easy to read and understand. It has a descriptive title, a data table that shows the data plotted on the chart, and the legend.

Complex yet Clear Chart:  This chart may seem daunting to create because of all the data included but you can easily create a clear chart with complex data just by adding a second axis.

Paying attention to factors that affect the effectiveness of your chart makes it easy to create a visually pleasing addition to your presentation.