Quantitative Techniques In Business
Task 1 – DATA EXTRACTION FROM FTSE 100
STOCK EXCHANGE Mark Allocation
From a reliable database select a company, within the FTSE 100.
Source cue: Company website, FAME, OSIRIS, Google Finance, Morning Star, Yahoo, Annualreports.com finance web pages.
1 (one) company on the FTSE 100 Stock Exchange, in the Manufacturing, Banking Sector and/or Retail Industry.
Present 5 years data on key aspects of the company performance including Sales/Turnover, Gross Profit, Operating Profit and Long term liabilities, (Net) Profit after Tax.
Forecast additional 5 years of each of the account balances.
Access via Library and Portal.
Using Ms Excel for extrapolating historical figures
Present both historical and future years in perspective, following years of automatic prediction by MS Excel.
TASK 2: PRESENT IN REPORT FORMAT THE JUSTICATION FOR THE COMPANY SELECTED. Mark Allocation
Justify the selection of the company chosen, following the format of a report, with cover page, title page, table of contents, introduction and chapter (sections) meeting each requirement of the assignment.
Using Turnover, Net Profit as X and Y respectively, across the 5 years, find the Pearson Coefficient of Correlation. Plot the scatter diagram graphs of relationship between these two across the years
Comment on the relationship between Long term liabilities and Net profits, as ascertained from the analysis of this company’s 5 year financial data.
Descriptive statistics of Mean and Standard Deviation for Gross Profit, Operating Profits, Long term liabilities, plotted on graphs and presented in the main section with commentaries on observations,
Compared against the historic and forecast years.
Use both variables in determining the required, this presented in report format within Section 2 of the work.
Testing ability to use and apply statistical tools and the ability to interpret data analyzed.
Task 3 PERFORM REGRESSION ANALYSIS WITH
A SPECIFIC YEAR Mark Allocation
Use Turnover as Y, find correlation equation with
Gross Profit, Operating Profits, Long term liabilities, Net-Profit as X1, X2, X3, X4, in the equation.
y = a + b1(x1) + b2(x2) + b3(x3) + b4(x4)
Carry out the analysis using the data variable for the forecast Gross Profit and Net Profit Ratio.
i.e. Use the forecast Turnover, Gross Profit, Operative Profits and Net Profits to do Regression analysis.
Task 4 Correlation Analysis Mark Allocation
Perform correlation analysis between the Net profits of 5 years, and Average Market prices of the shares for each of the years.
Analyze the forecast years in the light of the results from correlation and provide reasoned arguments on the future market share prices. Insights could be presented including potential future dividends.
Net profit and Market Price Share correlation
Guidance Structure of Report Writing or
Presentation Word Guidance
Write your report using the following contents:
[The objective of the report; finding the correlation and relationships between specific indicators of the Gross Profit and Net Profit of five years, using correlation and regression analysis. Justify the company selected.
2.0 Factors influencing the FTSE company:
[An overview of the sector, and company, historical factors, and business environment. Use any preliminary literature to support your work, with references.
3.0 Data Analysis and Findings:
[Descriptive statistics and regression and correlation analysis including commentaries and interpretations]
4.0 Conclusion and recommendation (s):
Provide a suitable conclusion and recommendation that of key factors noting the relationships between data, historical performance and future outlook, using the forecast data.
+ or – 10 %
Component Maximum Marks (%) Comments
Introduction 20 An excellent introduction should provide clarity on the relevance and the context of this report. It should also address the key highlights to be discussed in the report. One or two references should be included to add quality to presentation
Data Collection 15 The objective here is aimed at ensuring that data on the potential selected company would meet the requirements of the study.
Literature 10 The use of literature in justifying the analysis, including the specific validation of correlation and regression analysis as tools into understanding data behavior. Journal papers of no more than 7 years from publication should be used in these aspects.
Analysis of data 40 The integration of the statistical concepts with the real business environment will be the focus of this section. An excellent discussion should demonstrate two major things:
(a) Understanding of the concepts (by interpreting the output statistically);
(b) The application (relevance of the output or statistics) to business- in this context the company selected.
Similarly discussion in the context of descriptive statistics and regression should be supported with at least a reference each to enhance the quality of discussion;
Conclusion 15 The conclusion should be developed on the outcome of the analysis carried out within the main body. Key aspects will be the interpretation and the implications on company overall performance and returns to shareholders.
Overall Presentation 5 The award of marks in this section will be based on the quality of referencing (strictly Harvard Style); the quality of grammar; the quality of data presentation (Tables and Charts); formatting; and so on.
Learning Outcomes of Assignment:
Upon successful completion of the assignment the following learning outcomes should be met:
• Understand and be able to extract key financial data from class within the stock exchange using the Financial Analysis Made Easy (FAME).
• Using specific analytical tools to build understanding from financial data, on the performance of the company for the specific year. Comment on the performance from observation and analysis of financial data, in report format.
• Be capable of using other applications and their abilities to summarize, analyze and present data in a meaningful and appropriate manner.
Word Count and Weighting
This assignment is a 3000-word assignment and its worth 40% of the overall assessment.
The following Texts may be useful for this assignment
• Swift, L., Piff, S. (2010) Quantitative Methods for Business, Management and Finance, (5th Ed.) Palgrave.
• Oakshott, L. (2012) Essential Quantitative Methods for Business, Management and Finance, (5th Ed.) Palgrave Macmillan.
• Lucey, T (2002) Quantitative Techniques, Thomson Publisher.
• Field, A. (2009). Discovering statistics using SPSS. Sage publications.
• Sekaran, U., Bougie, R. (2009). Research Methods for Business: A skill Building Approach. John Wiley & Sons.