Business Statistics Assignment

Task 1) $m 0 - 30000 60000 90000 120000 150000 180000 210000 240000 270000 300000 330000 360000 390000 Companies 490 3 1 0 1 2 0 1 0 0 0 1 0

A ssets in 2000 in Millions of Dollars (population)

600 Number of Companies 500 400 300 200 100 0
90 00 0 15 00 00 21 00 00 27 00 00 33 00 00 39 00 00 30 00 0

$m

a) Central tendency: It is quite easy to see that the central tendency lies in the asset
range of $0-$30,000m. There are a few large outliers which would affect the mean so the median would probably be the most useful central tendency measurement.

b) The Dispersion of this Histogram: The range of assets in dollars for the population
is around $340,000 million. The standard deviation would be affected by the outliers which are extremely large in relation to the rest of the population.

c) The Shape of this Histogram: This histogram is positively skewed as the right tail is
much longer then the practically non existent left tail. This indicates the presence of a small proportion of relatively large values. The Kurtosis is positive as it has a very high peaked distribution. Task 2) No Improvement Mean 158.09 Standard Error 32.42 Median 58.10 Mode 106.40 Standard Deviation 442.21 Sample Variance 195,551.33 Kurtosis 30.80 Skewness 5.18 Range 3,959.30 Minimum -282.30 Maximum 3,677.00 Sum 29,404.30 Count 186.00 Improved Revenue Rank Mean 97.95 Standard Error 14.40 Median 45.50 Mode 7.20 Standard Deviation 255.20 Sample Variance 65,124.53 Kurtosis 88.91 Skewness 8.23 Range 3,679.20 Minimum -440.20 Maximum 3,239.00 Sum 30,755.40 Count 314.00

a) Central Tendency: The mean, is higher with the companies that showed no
improvement in profit for this population. The median amounts are much closer between the 2 types in this comparison. The mean could be much higher on the non improved types due to some outliers on the larger side of profit.

b) Dispersion: The range of non improved ranked companies and improved ranked
companies are very similar in this population, there is only difference of around $300m which is relatively small for this population. The standard deviation, or the average deviation from the mean is much higher for companies that didnt have any improvement. This would point to few large outliers that are affecting the mean of companies that did not improve their profit.

c) Shape: Both data sets are skewed positively meaning that there are some outliers
with larger then average profit. The Kurtosis is much higer with companies that improved their profit for 2000, this indicates that the peak would be more significant then for the data set where companies did not improve their profit. Task 3) a) Find the 1st, 2nd and 3rd Quartile for the year 2000 profits data from the population data:
1st Quartile 2nd Quartile 3rd Quartile $13.28m $47.95m $115.20m

b) What is the inter-quartile range? Inter-quartile range or IQR = Q3- Q1 in this case this would be: = 115.2 13.28 = $101.92m c) For the same data set find the 80th percentile using Excel. Explain what these figures mean in the context of the data. 80th percentile is $128.28m. As you can see the IQR amount of $101.92m is significantly higher then the 2nd quartile amount of $47.95m. This shows how the figures in this population for profits in the year 2000 are dispersed quite substantially around the median or 2nd quartile. This shows that there are outliers and possibly even more beyond the 80th percentil amount. Task 4) a) Use Excel and the sample data file to find the 95% confidence interval estimate, of the mean value of the year 2000 shareholders funds data:
Year 2000 Shareholders Funds in $m (sample data) Mean $1,039.78 Standard Deviation $2,211.92 LCL $291.37 UCL $1,788.19

b) Explain the meaning of this estimate in the problem context: The mean of this
sample of year 2000 shareholders funds in $ millions is $1,039.78 and with 95% confidence, we can say that the mean of the population is between $291.37m (Lower Confidence Level) and $1,788.19m (Upper Confidence Level).

c) Use the Population data file to find the population mean of year 2000 shareholders funds.
Year 2000 Shareholder Funds in $m (Population) Mean $1,241.03 Standard Error $151.25 Median $381.80 Mode $167.10 Standard Deviation $3,382.11 Sample Variance $11,438,648.34 Kurtosis $78.66 Skewness $7.85 Range $44,843.90 Minimum $0.20 Maximum $44,844.10 Sum $620,512.80 Count $500.00

d) Was the interval estimate obtained above satisfactory? Explain why or why not. The mean for the whole population is $1,241.03m. This is well within the LCL of $291.37m and UCL of $1,788.19m and only $201.25m more then the sample mean.

5) a) Use excel and the sample data file to find the 90% confidence interval estimate of the proportion of companies that improved revenue rank from 1999 to 2000.
z-Estimate: Proportion (Sample) Proportion Sample Proportion 0.722 Observations 36.000 LCL 0.599 UCL 0.845

b) The sample proportion of companies that improved revenue rank is 72.2%. This sample proportion can be used as a point estimate of the companies that have improved revenue rank out of the sample data. The confidence interval tells us that we can be 90% confident that the sample proportion of call companies that increased revenue rank are between (LCL) 59.9% and (UCL) 84.5%. c)
z-Estimate: Proportion (Population) Sample Proportion Observations LCL UCL Proportion 0.6280 500 0.5924 0.6636

d) Was the interval estimate obtained above satisfactory? Explain why or why not.

6) a)
Year 2000 Profits ($m) (sample) 99% confidence Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count Confidence Level (99.0%) 94.260 25.808 46.600 7.200 152.685 23312.708 7.237 2.623 688.400 -31.900 656.500 3299.100 35.000 70.416

b) The Standard Error is 25.808. This is the standard deviation of the sampling distribution.
The confidence interval

Confidence limits:

= sample mean t x (standard error) = 94.260 70.416 = 164.676 and 23.844

c) The confidence interval tells us that we can be 99% confident that the sample population mean number of profits for the companies were between $164.676m and $23.844m 7) a)
t-Test: Mean (sample) Year 2000 Profit Profit 89.239 153.474 500.000 35.000 3.450 0.001 1.690 0.001 2.030

Mean Standard Deviation Hypothesized Mean df t Stat P(T<=t) one-tail t Critical one-tail P(T<=t) two-tail t Critical two-tail

b) H0: Mean profit in the year 2000 is $500 million (profits = $500 million). HA: Mean profit in the year 2000 less than $500 million (profits < $500 million)

c) It is one tailed negative test as we are testing if the profit is less than the hypothesized value. d) For a one tail negative test, if t observed value (t Stat) is less than zero, and p-value (P(T<=t)) is less than the significance level, we must reject the Null Hypothesis, H0. Decision: t stat (3.450) is greater than zero, and the p value (0.001) is less than the significance level, therefore we cant reject H0. It does not meet both requirements therefore we cannot rule out the Null Hypothesis. e) Conclusion: At the 5% level of significance, there is no evidence to show that the mean profits of the companies is less than $500 million. 8) a)
t-Test: Mean (sample) Year 2000 Assets Assets 3265.725 4920.721 3500.000 35.000 -0.286 0.388 2.438 0.777 2.724

Mean Standard Deviation Hypothesized Mean df t Stat P(T<=t) one-tail t Critical one-tail P(T<=t) two-tail t Critical two-tail

b) H0: Mean assets for the year 2000 is $3500 million (assets = $3500 million) HA: Mean assets for the year 2000 was less than $3500 million (assets < $3500 million). c) It is a one tailed negative test as we are testing if the assets are less than the hypothesized value. d) (| t Stat | = 0.286) < ( | t Critical | = 2.438)

Decision: absolute t Stat is less than the absolute t Critical value, therefore do not reject H0, (assets = $3500 million) e) Conclusion: At the 1% level of significance, there is no evidence to show that the mean assets of the companies is less than $3500 million (assets < $3500 million). 9) a)

t-Test: Two-Sample Assuming Equal Variances (sample)

Mean Variance Observations Pooled Variance Hypothesized Mean Difference df t Stat P(T<=t) one-tail t Critical one-tail P(T<=t) two-tail t Critical two-tail

No improvement 5777.920 68280854.697 10.000 22355520.023 0.000 34.000 1.977 0.028 2.441 0.056 2.728

Improvement 2299.496 5822399.540 26.000

b) H0: Mean assets for companies that improved revenue rank is equal than companies that didnt improve revenue rank. (improved = not improved) HA: Mean assets for companies that improved revenue rank is greater than companies that didnt improve revenue rank. (improved not improved) c) This is a two tailed test as we are testing whether the companies with an improved revenue rank had different mean assets for year 2000 than the companies that didnt improve revenue rank. d)
P(T<=t) two-tail = 0.056 is greater than Alpha (significance) = 0.01

Decision: Therefore, we do not reject the Null Hypothesis as the p-value is greater than the significance. e) Conclusion: At a 1% level of significance level, there is no evidence to show that the companies that did improve their revenue rank had assets for the year 2000 that werent equal to that of the companies that didnt improve their revenue rank.

10) a)
t-Test: Paired Two Sample for Means

Mean Variance Observations Pearson Correlation Hypothesized Mean Difference df t Stat P(T<=t) one-tail t Critical one-tail P(T<=t) two-tail t Critical two-tail

Year 2000 profits 89.239 23554.246 36.000 0.427 0.000 35.000 1.415 0.083 1.690 0.166 2.030

Year 1999 profits 31.256 72115.212 36.000

b) H0: The year 2000 mean profits were equal to the 1999 profits. (2000profits = 1999profits) HA: The year 2000 mean profits were equal to the 1999 profits. (2000profits > 1999profits) c) This is a one tailed positive test as we are testing whether the year 2000 profits mean is greater than the profits of that in year 1999. d)