Financial Statistics Assignment Solution

FINANCIAL STATISTIC
STUDENT ID:
[Pick the date]

Introduction
The objective of the given report is to analyse the historical sales trends which have been observed
in three countries namely Federated Islands, Industria, Nokaragua. These trends need to be analysed
with the usage of various descriptive statistics tool such as summary statistics, correlation and
regression analysis. A model also has been suggested using multiple regression so as to be able to
forecast the sales for the given countries using the values of the various independent variables.
Additionally, a comparison is drawn for the three countries with Sweden so as to identify as to which
country is similar to Sweden the most based on the parameters provided.
Federated Islands
Summary Statistics
The relevant descriptive statistics in relation to this country are captured through the summary
statistics as highlighted below.
On the basis of the above, it may be estimated that the average annual sales for this country is
$713,603. However, the median sales level is higher at $ 756,207 which implies that there have been
certain years when the sales has been significantly lower and some of these values may also be
considered as outlier. This observation is also confirmed from the skew value which is negative.
Additionally the standard deviation along with range highlight that dispersion for sales is medium
only and not very high which may be attributed to sales moving in an incremental manner only.
The mean GDP for this country is $ 223 million. The median amount is slightly higher which may be
on account of the higher growth that the country has clocked in the recent years which can
potentially make the previous values as small and potential outliers. Also, the dispersion witnessed
in the GDP data for the country has been low to medium as has been captured using the relevant
measures such as range and standard deviation. Besides, the amount of skew present is only slight
and negative.
The mean GDP/capita for this country is about $ $17,665. The corresponding median value is smaller
at $ 17,434. This may be attributed to the recent economic performance whereby above average
GDP growth may have been observed owing to relatively higher of GDP per capita and potentially
distorting the mean to some extent. The positive skew value tends to support the same. Further, the

dispersion observed with regards to GDP/capita seems to be on the low to medium end only
considering the respective values of standard deviation, range in relation to the mean value.
Correlation Analysis
The correlation analysis of the Sales with various independent variables is highlighted in this section.
It is apparent from the above scatter plot that there is a strong positive correlation between the
number of stores and the sales which is on expected lines as higher number of stores tends to
enhance the reach.
It is apparent from the above scatter plot that there is a strong positive correlation between the
advertisement and the sales which is on expected lines as higher advertisement tends to promote
sales.

The relative deviation from the line of best fit is more in this case and hence only medium strength
positive correlation is observed between the given variables.
Regression Analysis
In order to forecast the sales going ahead, a multiple regression model has been predicted using the
given information. The output of this model as obtained from MS- Excel is shown below.
The key observations from the above result are summarised below.
 R square or coefficient of determination has come out as 0.9974. This implies that all the
independent variables are jointly able to account for 99.74% of the changes observed in the

sales. This highlights the given model represents a good fit as the prediction power seems
quite high.
 From the ANOVA analysis highlighted above, it is apparent that the significance F value has
come out to be zero. This implies that at 1% significance level, the linear multiple regression
model is significant since there is atleast one significant slope coefficient.
 With regards to the significance of the slope coefficient, it is apparent that the slope
coefficient for GDP and population are not significant owing to their p value being greater
than 0.05. The other independent variables are significant for sales determination.
Industria
Summary Statistics
The relevant descriptive statistics in relation to this country are captured through the summary
statistics as highlighted below.
As per the above information , it may be estimated that the average annual sales for this country is
$17,372,234 However, the median sales level is lower at $17,017,460 which implies that there have
been certain years when the sales has been significantly higher and some of these values may also
be considered as outlier. In comparison to Federated Island, the sales are significantly higher. The
sales figure also exceeds the Nokaragua sales level. The dispersion for the sales seems to be on the
lower to medium end considering dispersion measures.
The mean GDP for this country is $ 134 billion. The median amount is slightly higher which may be
on account of the higher growth that the country has clocked in the recent years which can
potentially make the previous values as small and potential outliers. Thus, it can also be concluded
that the GDP of this country is significantly higher than Federated Island but is lower than the GDP of
Norkaragua. The dispersion for the GDP seems to be quite low based on the dispersion measures
deployed.
The mean GDP/capita for this country is about $48,675. The corresponding median value is higher at
$ 51,837. At this value, the GDP/capita tends to be almost thrice the level witnessed for Federated
Island and is marginally higher than the level witnessed for Nakaragua. The dispersion for the sales
seems to be on the lower to medium end considering dispersion measures.

Correlation Analysis
The correlation analysis of the Sales with various independent variables is highlighted in this section.
Owing to the negative slope, the relationship between survey score and sales seems to be negative
which is rather surprising. However, the strength of the relationship is weak owing to which it lacks
significance.
A strong positive association is observed between advertisement and sales but the relationship
seems weaker than observed in case of Federated Island. However, it is still significant.

The relationship between GDP and sales seems to be positive and strong which is different from
Federated Island where GDP was not a significant variable with regards to Sales. A higher GDP tends
to lead to higher economic growth leading to higher purchase from customers.
The association between price index and sales does not seem to be of significance considering the
weak strength of the relationship.
Regression Analysis
The relevant output for multiple regression model using sales as the dependent variable and other
given variables as the independent variable is highlighted below.

The key observations from the above result are summarised below.
 R square or coefficient of determination has come out as 0.9935. This implies that all the
independent variables are jointly able to account for 99.35% of the changes observed in the
sales.
 From the ANOVA analysis highlighted above, it is apparent that the significance F value has
come out to be zero. This implies that at 1% significance level, the linear multiple regression
model is significant since there is atleast one significant slope coefficient.
 With regards to the significance of the slope coefficient, it is apparent that the slope
coefficient for stores and population are not significant owing to their p value being greater
than 0.05. The other independent variables are significant for sales determination.
Nokaragua
Summary Statistics
The relevant descriptive statistics in relation to this country are captured through the summary
statistics as highlighted below.

As per the above information, it may be estimated that the average annual sales for this country is
$7,859,679. However, the median sales level is higher at $7,949,044 which implies that there have
been certain years when the sales has been significantly higher and some of these values may also
be considered as outlier. In comparison to Federated Island, the sales are significantly higher. The
dispersion for the sales seems to be on the lower end considering dispersion measures.
The mean GDP for this country is $ 171 billion. The median amount is slightly lower implies that in
the recent years the country has witnessed rapid growth owing to which the average GDP tends to
higher than the median value. Also, for the given countries, Nokaragua tends to have the highest
GDP.The dispersion for the GDP seems to be quite low based on the dispersion measures deployed.
The mean GDP/capita for this country is about $48,018. The corresponding median value is lower at
$ 47,138. The dispersion for the sales seems to be on the lower to medium end considering
dispersion measures.
Correlation Analysis
The correlation analysis of the Sales with various independent variables is highlighted in this section.
It is apparent on the basis of the above scatter plot that the association between the given variables
is quite weak and hence not of any significance.

There is almost a perfect linear association between the given variables as it is apparent that higher
advertisement leads to higher sales being generated.
There is a strong positive association between stores and sales implying that higher stores would
potentially lead to higher sales.

A strong positive association is observed between GDP and sales, thus leading to the conclusion that
higher GDP is conducive to higher sales generation.
Regression Analysis
The output for the regression model based on the data provided for this country is as highlighted
below.
The key observations from the above result are summarised below.
 R square or coefficient of determination has come out as 0.9980. This implies that all the
independent variables are jointly able to account for 99.80% of the changes observed in the
sales.

 From the ANOVA analysis highlighted above, it is apparent that the significance F value has
come out to be zero. This implies that at 1% significance level, the linear multiple regression
model is significant
 With regards to the significance of the slope coefficient, it is apparent that the slope
coefficient for population is not significant owing to the p value being greater than 0.05. The
other independent variables are significant for sales determination.
Comparison with Sweden
The various descriptive statistics for Sweden are as highlighted below.
The GDP per capita for Sweden is about $ 48193. As a result, this value is comparable to both
Industria and Nakaragua since both have their GDP per capita in the same vicinity. However, Sweden
cannot be compared with Federated Island as the GDP per capita is significantly smaller. In order to
determine as to which country can be considered as a proxy for Sweden, there is a need to compare
the average GDP. Based on the above table, the average GDP of Sweden is about $ 290 billion. This is
quite clearly much greater than any of the three countries but the one that comes closest is
Nakaragua. Also, the average price index of Sweden at 2.14 is comparable to that of Nakaragua
which has a corresponding figure of 2.04. Thus, the economy of Sweden for the purposes of this task
can be compared with Nakaragua.