Financial Analysis Report: Stock Market Analysis and Recommendations

This report presents a financial analysis of U.S. stock market data, focusing on the identification of variables and their types, descriptive statistics of stock returns and firm size, and graphical representations of frequency distributions. It examines the correlation between stock returns and firm size, past returns, and trading value. The analysis includes tables providing joint information on stock exchanges and average stock returns across different industries. Based on these findings, the report offers recommendations to investors in the U.S. stock market, emphasizing the volatility observed and the importance of considering risk and return profiles. The report utilizes statistical tools such as regression analysis and correlation coefficients to provide a comprehensive overview of the data and its implications for investment decisions. The findings suggest that investors should carefully assess the risk and return associated with each investment option before making any investment decisions.

RUNNING HEAD: - Financial analysis 0 | P a g e
Financial analysis
Module Number

Financial analysis 1 | P a g e
Executive summary
This report reveals the key implication of the stock exchange and average stock relation
and how they are interlinked with each other. This report divulges the key aspects of the stock
exchange and return provided by the company and industries stock return. However, it has been
found that the stock return of one industry is different than other and factors affecting the
business return in particular industry also differ. The scatter plot and correlation between the two
gathered variables have been given which reflects the key implication of the joint information
given in the investment decisions. Nonetheless, company giving the higher return will be
undertaken for the investment purpose by the investors.

Financial analysis 2 | P a g e
Table of Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
Identify the variables and their types and scales of measurement...................................................3
Complete descriptive statistics on ‘stock return’ and ‘firm size......................................................3
two bar charts to graphically represent the frequency distribution of stock exchanges and of
industries..........................................................................................................................................5
Tables providing joint information:.................................................................................................6
Charts providing joint information:.................................................................................................7
Scatter plot and correlation analysis:...............................................................................................9
Recommendations to investors in the U.S. stock market:.............................................................11
References......................................................................................................................................12
Appendix........................................................................................................................................13

Financial analysis 3 | P a g e
Introduction
With the increasing business complexities, investors before investing their capital needs to assess
which part of investment options needs to be undertaken by the investors for their investment
purpose, the risk and return associated with the investment needs to be assessed. This report
divulges the scatter plot and correlation between the two gathered variables and undertaken
investment decisions which investor needs to assess for the investment decisions.
Identify the variables and their types and scales of measurement
There are several variables such as market beta, hypothesis and selected return based on the
market ups and down. It has been analyzed that there are several types of variables such as
nominal, ordinal, interval and ratio which is used to assess the financial performance and ups and
down related to the market business position of the company (Bendat, & Piersol, 2011).
In the given case return and beta associated with the company and its index is considered to be
the variables of the company. However, the measures in that case could be charts, beta analysis
and joint information decisions undertaken for the investment assessment program (Bekelman,
Li, & Gross, 2013).
Complete descriptive statistics on ‘stock return’ and ‘firm size
When the Statistics of stock return and past return stock has been taken.
SUMMARY OUTPUT

Financial analysis 4 | P a g e
Regression
Statistics
Multiple R 0.111621
R Square 0.012459
Adjusted R
Square 0.012109
Standard
Error 12.23185
Observatio
ns 2824
ANOVA
df SS MS F
Significan
ce F
Regression 1 5326.9 5326.9
35.60
33 2.72E-09
Residual 2822
422222.
4
149.61
82

Financial analysis 5 | P a g e
Total 2823
427549.
3
Coefficie
nts
Standar
d Error t Stat
P-
value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept -12.4907
0.23017
7
-
54.265
7 0 -12.942
-
12.03
94 -12.942
-
12.039
4
X Variable
1 0.098162
0.01645
1
5.9668
5
2.72E-
09 0.065904
0.130
42
0.0659
04
0.1304
2
(Please excel file attached)

Financial analysis 6 | P a g e
When the Statistics of stock return and firm size has been taken.
SUMMARY
OUTPUT
Regression
Statistics
Multiple R
0.2474
44
R Square
0.0612
29
Adjusted R
Square
0.0142
9
Standard
Error
14.699
94
Observations 22
ANOVA
df SS MS F
Significa
nce F
Regression 1 281.8745
281.8
745
1.304
442
0.26689
3

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Residual 20 4321.762
216.0
881
Total 21 4603.637
Coeffic
ients
Standard
Error t Stat
P-
value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept
-
3.3126
3 3.713869
-
0.891
96
0.383
019 -11.0596
4.4343
62
-
11.0596
4.43436
2
X Variable 1
-
0.0028
4 0.002486
-
1.142
12
0.266
893 -0.00803
0.0023
47
-
0.00803
0.00234
7
two bar charts to graphically represent the frequency distribution of stock exchanges and
of industries.
3 183 363 543 723 903 1083126314431623180319832163234325232703
-100000
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
Stock frequency and distribution of
stock exchange
Axis Title

Financial analysis 8 | P a g e
3 171 339 507 675 843 10111179134715151683185120192187235525232691
-100000
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
Stock frequency, distribution of stock exchanges
and of industries
Stock return Firm size Past return
Tables providing joint information:
a. Stock exchanges and average stock return:
Exchang
e Name Average return
1 NYSE -12.36809075
2 AMEX -15.34414464
3 NASDAQ -12.25445335
b. Different industries and average stock return:

Financial analysis 9 | P a g e
Industry
code Industry name
Average
return
1 Agriculture, Forestry and Fishing -5.588479119
2 Mining -21.02784752
3 Construction -12.93519151
4 Manufacturing -13.00209053
5 Transportation, communications, electric, gas and sanitary service -10.58379599
6 Wholesale Trade -11.69227980
7 Retail Trade -13.80213902
8 Finance, Insurance and Real Estate -10.38312141
9 Services -12.01556899
10 Public Administration -14.40859921

Financial analysis 10 | P a g e
Charts providing joint information:
NYSE AMEX NASDAQ
-18.00000000
-16.00000000
-14.00000000
-12.00000000
-10.00000000
-8.00000000
-6.00000000
-4.00000000
-2.00000000
0.00000000
Stock exchange and average return
Average return
Agriculture, Forestry and Fishing
Mining
Construction
Manufacturing
Transportation, communications, electric, gas and sanitary service
Wholesale Trade
Retail Trade
Finance, Insurance and Real Estate
Services
Public Administration
-25.00000000
-20.00000000
-15.00000000
-10.00000000
-5.00000000
0.00000000
Industries and average return
Average return

Financial analysis 11 | P a g e