Forbes 500 Random Subsample ($, millions) Assets Sales Market Net Cash Number of

Question

Forbes 500 Random Subsample ($, millions)

                                        

Assets       Sales         Market      Net            Cash          Number of (thousands)

                                    Value        Profit         Flow

                                                                  

1,034.00    1,510.00    697.00       82.60         126.50       16.60

956.00       785.00       1,271.00    89.00         191.20       5.00

1,890.00    2,533.00    1,783.00    176.00       267.00       44.00

1,133.00    532.00       752.00       82.30         137.10        2.10

11,682.00 3,790.00    4,149.00    413.50       806.80       11.90

6,080.00    635.00       291.00       18.10         35.20         3.70

31,044.00 3,296.00    2,705.00    337.30       425.50       20.10

5,878.00    3,204.00    2,100.00    145.80       380.00       10.80

1,721.00    981.00       1,573.00    172.60       326.60       1.90

2,135.00    2,268.00    2,634.00    247.20       55.50         21.20

Explanation / Answer

THE data here is

TO construct a correlation matrix, open a spreadsheet paste this data in it. Go to data->data analysis->correlation

Give the input range as the above table tick on labels as first row and give an output range as a cell reference from where you want your output to start, to be displayed

you will get something like this

This is the correlation matrix, we substitute the same values in the rows as well to complete the matrix, For eg 1,2 entry will be same as 2,1 entry. as correlation between 1 and 2 is same as between 2 and 1

Now we see that sales has a high correlation with all others

This indicates that sales can be explained by other variables

so you can now run a regression with sales as the dependent variable and others as independent variables.

So move sales data to the first column and others together towards the right

run a regression now and you will get the following results

Assets Sales Market Value Net Cash Flow Number of(thousands) Profit 1,034.00 1,510.00 697 82.6 126.5 16.6 956 785 1,271.00 89 191.2 5 1,890.00 2,533.00 1,783.00 176 267 44 1,133.00 532 752 82.3 137.1 2.1 11,682.00 3,790.00 4,149.00 413.5 806.8 11.9 6,080.00 635 291 18.1 35.2 3.7 31,044.00 3,296.00 2,705.00 337.3 425.5 20.1 5,878.00 3,204.00 2,100.00 145.8 380 10.8 1,721.00 981 1,573.00 172.6 326.6 1.9 2,135.00 2,268.00 2,634.00 247.2 55.5 21.2

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