The relative frequency in accounting terms, refers to a statistical mean by which the number of times that the same event is repeated within a given time can be obtained. These statistical data, which show the relative frequency, help us discover how the same event or event is repeated or how often.
Now we are clear about this definition of relative frequency, it is convenient to know that it is not the same as Absolute frecuency, since the absolute will always be the total number of times that this event takes place, meanwhile, the relative is calculated from the absolute, dividing it by the number of events.
How to calculate relative frequency
From what has been said in the previous lines, to calculate the relative frequency we have to calculate the absolute frequency first. Once we have the absolute calculated, we will put into practice the formula for the relative frequency, where Hi represents the relative frequency, while Fi represents the absolute frequency and where N will be the total number of observations of the event.
As we observed, the relative frequency is calculated by dividing the relative frequency by a number of data, and it helps us to know how important a value is compared to the sample. Of course, the relative frequency can be explained in three ways: by means of a decimal, a fraction or a percentage, since it is the quotient derived from two numbers.
When we talk about accumulated relative frequency, this will be the calculation resulting from the division between the accumulated frequency with respect to the total number of data.
Relative frequency example
Here is an example of relative frequency, calculated based on absolute frequency. In a way, the relative frequency helps us to visualize the data, to better understand a variable.