5) Draw the trend analysis based on following sales data for four years and analyse the...

5) Draw the trend analysis based on following sales data for four years and analyse the fifth-year projected sales. Mention the possible relationship between the sales and the year on the basis of linear regression. Also mention the R-square value and its interpretation.

Year	Sales
1	900
2	1100
3	1200
4	1450
5

Solutions

Expert Solution

Excel regression summary output as follows.

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.9880
R Square	0.9761
Adjusted R Square	0.9641
Standard Error	43.3013
Observations	4

ANOVA
	df	SS	MS	F	Significance F
Regression	1	153125	153125	81.6667	0.0120
Residual	2	3750	1875
Total	3	156875

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	725	53.0330	13.6707	0.0053	496.8174	953.1826
Year	175	19.3649	9.0370	0.0120	91.6795	258.3205

Estimated linear trend equation: Sales = 725 + 175 x Year

When Year = 5, Trend value of sales = 725 + 175 x 5 = 725 + 875 = 1600

R² measures the proportion of variation of Sales, that is explained by the independent variable Year, using the regression model. Since R² is 0.9761, it means that 97.61% of the variation in sales is explained by the model, which is considered a good fit.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Draw the trend analysis based on following sales data for four years and analyse the fifth-year...

Draw the trend analysis based on following sales data for four years and analyse the fifth-year projected sales. Mention the possible relationship between the sales and the year on the basis of linear regression. Also mention the R-square value and its interpretation. Year Sales 1 900 2 1100 3 1200 4 1450 5

5) Based on quarterly data collected over the last four years, the following regression equation was...

5) Based on quarterly data collected over the last four years, the following regression equation was found to forecast the quarterly demand for the number of new copies of an economics textbook: t= 3,305 – 665 Qtr1 – 1,335 Qtr 2 + 305 Qtr3, where Qtr1,Qtr2, and Qtr3 are dummy variables corresponding to Quarters 1, 2, and 3. The demand forecast for Quarter 2 of the next year is ________. A) 2,640 B) 1,970 C) 3,610 D) 3,305 2) In...

Analyse and compare administrative based data and clinical based data.

Based on the reviews of the Financial Ratios and Trend Analysis, respond to the following questions....

Based on the reviews of the Financial Ratios and Trend Analysis, respond to the following questions. You are encouraged to research outside sources and, of course, cite them. Do not, however, quote sources word-for-word, but rather, respond to the Discussion Forum Question in your own words. 1. What three factors would influence your evaluation as to whether a company’s current ratio is good or bad, why? 2. Suggest several reasons why a 2:1 current ratio might not be adequate for...

The following data based on assumption for 2 years projection, Analysis the following income statement and...

The following data based on assumption for 2 years projection, Analysis the following income statement and state whether investor should invest the company or not (250 words minimum) YEAR 1 YEAR 2 Revenues $ 2,995,000 $ 3,200,000 Cost of sales 1,894,000 2,100,000 Gross profit $ 1,101,000 $ 1,100,000 Accounting 8,000 8,300 Advertising and promotion 17,000 11,000 Bank chargers 51,000 55,897 Compensation and benefits 197,546 234,985 Insurance 5,000 5,550 Lease, facilities 350,600 456,000 Legal and professional 15,900 15,900 Licenses and fees...

Provide a statistical trend analysis on the following data. Show this in a visual graph using...

Provide a statistical trend analysis on the following data. Show this in a visual graph using excel. Explain in detail the trend comparing Toys R Us to the other two corporations, Amazon and Target. Can this information be used to provide future trends in sales and possibly prevented bankruptcy for Toys R Us. Do you see any underlying patterns or behaviors? Net sales In millions (other than stores) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 13,794 ...

Suppose we have the following annual sales data for an automobile dealership: Year Sales Trend 2009...

Suppose we have the following annual sales data for an automobile dealership: Year Sales Trend 2009 121 1 2010 187 2 2011 165 3 2012 134 4 2013 155 5 2014 167 6 2015 200 7 2016 206 8 2017 221 9 2018 231 10 We want to forecast sales for 2019 and 2020 using either a simple trend model or a quadratic trend model. Use a within sample forecasting technique to determine the best model using the RMSE measure...

Trend Analysis - The following data pertain to Company A: (in millions) Year 2 Year 1...

Trend Analysis - The following data pertain to Company A: (in millions) Year 2 Year 1 Revenue $39,474 $35,137 Net income 5,658 5,642 Accounts receivable 4,389 3,725 Inventory 2,290 1,926 Total current assets 10,151 9,130 Total assets 34,628 29,930 Total current liabilities 7,753 6,860 Total long-term liabilities 9,641 7,702 Total stockholder equity 20,000 18,000 Common-Size Income Statements - Company A reported the following income statements: COMPANY A INCOME STATEMENT FOR THE YEARS ENDED DECEMBER YEAR 2 AND YEAR 1 (in...

1. Prepare a trend analysis from the following sales, assuming a base year of 2015. Round...

1. Prepare a trend analysis from the following sales, assuming a base year of 2015. Round to the nearest whole percent. 2018 2017 2016 2015 Sales $25,000 $60,000 $50,000 $70,000

Morningside Technologies Inc. uses flexible budgets that are based on the following data: Sales commissions 5%...

Morningside Technologies Inc. uses flexible budgets that are based on the following data: Sales commissions 5% of sales Advertising expense 25% of sales Miscellaneous administrative expense $1,450 per month plus 2% of sales Office salaries expense $14,000 per month Customer support expenses $2,050 plus 3% of sales Research and development expense 3,600 per month Prepare a flexible selling and administrative expenses budget for April for sales volumes of $90,000, $115,000, and $135,000. Enter all amounts as positive numbers. Morningside Technologies...

Subjects