A Regression Analysis Relating a Company's Sales, Their Advertising Expenditure

question 52

Essay

A regression analysis relating a company's sales, their advertising expenditure, price, and time resulted in the following.
a.At 95% confidence, determine whether or not the regression model is significant. Fully explain how you arrived at your conclusion (give numerical reasoning) and what your answer indicates.
b.At 95% confidence determine which variables are significant and which are not. Explain how you arrived at your conclusion (Give numerical reasoning).
c.Fully explain the meaning of R-square, which is given in this model. Be very specific and give numerical explanation.

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Definitions:

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of reporting periods to identify trends and growth patterns.

Comparative Income Statements

Financial statements that present the revenues, expenses, and net income of a company over multiple periods for comparison.

Debt Management Ratios

Those ratios—debt to total assets, debt to stockholders’ equity, and times interest earned—which measure a company’s mix of debt and equity financing.

Equity Financing

The process of raising capital through the sale of shares in a company, leading to share ownership by investors.