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Financial Analysis and Forecasting
Finance & Accounting
Pages 7 (1757 words)
Financial Analysis and Forecasting Name Institution Financial Analysis and Forecasting A) Does it appear that the proportionality assumption holds true? Explain. SUMMARY OUTPUT Regression Statistics Multiple R 1 R Square 1 Adjusted R Square 1 Standard Error 1.03226E-15 Observations 5 ANOVA df SS MS F Significance F Regression 1 160.1971 160.1971 1.5E+32 1.2E-48 Residual 3 3.2E-30 1.07E-30 Total 4 160.1971 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 3.55271E-15 1.6E-15 2.216969 0.113363 -1.5E-15 8.65E-15 -1.5E-15 8.65E-15 X Variable 1 0.5 4.08E-17 1.23E+16 1.2E-48 0.5 0.5 0.5 0.5 From the results obtained above, the regression
analysis shows that there exist a perfect relationship between sales and assets. The value of R-square is 1 this shows a perfect relationship that will produce a best-line-of fit that passes through the origin. The proportionality assumption that the value of assets increases proportionally with sales is therefore, holds, and is true. B) Repeat the part a regression analysis assuming the given data. Under these conditions, does it appear that the proportionality assumption holds true? Explain. From the results obtained below, the R squared value is 0.906304 this shows a good relationship because the R square value tends to 1, which is usually a perfect relation. ...
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