Analysis of Sales and Profit Margins for ABZ Corporation

BUSINESS STATISTICS
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Introduction
The given scenario pertains to a global corporation i.e. ABZ which is into sales of various products such
as CD/DVD, books.In recent times, the company is facing challenges with regards to falling sales and
reducing profit margins. In order to analyse these problems and provide suggestions, sample data has
been provided with regards to the customer data. This report presents the findings in this regards.
Problem Definition
It is apaprenr that there are two key issues which are faced by the company namely the falling sales and
the falling margins. As a result, statistical test has been condcuted for ascertaining the dioffrence in
variance of opening gross sales and total gross sales. Besides, the relationship between gross profit
margin and P/E ratio is also compared to highlight the nature of their respective movement. Also, in
order to understand the gender implications of amount spent, hypothesis test has been conducted to
reflect whether a particualr gender is a higher spender than the other. Additionally, hypothesis test has
also been ocnducted to ascertain if the product pruchase is related to the type of customer or not. Also,
the relaitonship of opening gross sale and revenue has been critically analysed with suitable hypothesis
test. Finally, the impact of gross sales on gross margins has been analysed through the use of regression.
Variance/Standard deviation
For comparing the variances across the opening gross sales and total gross sales, the F test based
hypothesis test needs to be conducted.
H0: σ²Opening = σ²Total
H1: σ²Opening ≠ σ²Total
The relevant output of the F test obtained from excel for the given data is shown below.
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It is apparent that the one tail p value is zero and hence the associated two tail p value would also be
zero. Since the p value is lower than assumed level of significance and hence the null hypothesis would
be rejected, thereby accepting the alternative hypothesis (Flick, 2015). As a result, there is significant
difference in the variance of opening gross sales and total gross sales.
Covariance
The value of covariance between price per earnings ratio and gross profit margin comes out to be 55.50
and the same has been computed using the Excel function COVAR. Since the covariance is positive, it
implies that both the given variables tend to move in the same direction. This is on expected lines since
higher gross profit margins would increase the profits which in turn would result in higher P/E ratio for
the business (Hillier, 2016).
Independent sample T- test
The relevant hypotheses are indicated below.
H0 : Amount paid to male = Amount paid to female (significant different is not present between amount
paid to male and female)
H1 : Amount paid to male ≠Amount paid to female (significant different is present between amount
paid to male and female)
The relevant output for the given hypothesis test is obtained from Excel and indicated below.
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