Business Statistics

Task 1: Write an introduction that s u m m a r i s e s t h e background and relevant information

about the selected company. (No more than two pages) (5 Marks)

Task 2

You have to collect Sales Revenue or Profit figures for a minimum of the last 7 years and maximum

10 years for your selected company.

A series of Sales Revenue or Profit figures will be your first quantitative variable. Make a table of this

data with two columns labelled as Years and Sales Revenue or Profit.

You can find this information in the annual reports of the company. Some companies have their

annual reports in the archive section of the website. (3 Marks)

Task 3

Please refer to the last few pages of this instruction sheet. You have to select one macroeconomic

variable such as inflation rate, unemployment rate, etc

You will have to collect the selected macroeconomic variable for the same period as the Company

variable.

Tabulate the data in three columns i.e. years, Sales Revenue or Profits and your selected macroeconomic

variable.

Task 4: Draw appropriate graphs in MS Excel, and submit print-outs for the variables below. (3+3 = 6 Marks)

a) Sales/Revenue/Profits and your chosen macroeconomic variable

b) Y e a r s and Sales/Revenue/Profits

Task 5: Answer the following questions with regards to the first graph

a) Which variable did you put on the x-axis and which variable did you put on y-axis

(2 Marks)

b) Why? (2 Marks)

c) Analyse the first graph in terms of correlation between sales/revenue and

macroeconomic variable. Identify the type of relationship that exists between the

two variables. Provide an explanation. (5 Marks)

d) State the value of an appropriate correlation coefficient. You have to calculate the

Pearson’s Product Moment Correlation and Spearman’s Rank Order correlation. You

can use the MS Excel function. (3 + 3 Marks)

e) Is there any difference between the two correlation coefficients that you have

calculated? Which coefficient is more suitable for your data set and why? (5 Marks)

f) What the does value of t h e correlation coefficient suggest about the

relationship between the two variables. (5 Marks)

g) Draw a line of best fit using the MS Excel function ‘TREND LINE’. (3 Marks)

h) Insert the regression equation for the linear trend line on the chart. (3 Marks)

i) With the help of this regression equation make at least three different predictions

for sales/revenue figures. Two values of the macroeconomic variable that you will

choose should be within the range that you have collected and the third one should

be outside the range. (6 Marks)

j) Comment on the reliability of your predictions by using the coefficient of determination

as a tool. State at least two reasons why each of the predictions may or may not be

reliable. (5 Marks)

k) Write a summary of the analysis of correlation and regression conducted above, in no

more than one page. (6 Marks)

Task 6

a) Using the freehand graphical method, predict the sales/revenue/profit for the next

two years. (Do it manually on graph paper or on excel) (3 Marks)

b) Using the semi-average method, predict the sales/revenue/profit for the next two

years. (Do it manually on a graph paper or on excel) (5 Marks)

c) Using the least squares method, predict the sales revenue for the next two years.

(You need to do this by framing the least squares equation manually by coding the

years.) (6 Marks)

d) Using the MS Excel method of prediction (the ‘FORECAST’ function), predict the

sales/revenue for the next two years. (3 Marks)

Task 7

Prepare a comparative table for the predictions using all the different methods. (2 Marks)

Task 8

Provide an analysis of the above table. In your opinion, which of the above methods are

more suitable for making predictions? And also, how reliable are your predictions for

Sales/Revenue/Profits. Provide reasons to support your answer. (6 Marks)