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# [Type the document title]

## [Type the document title]

Contents
ANSWER 2: LINE GRAPH OF PROFIT ........................................................................................................................................4

## REVENUE AND PROFIT .................................................................................................................................................... 8

ANSWER 7: CONCLUDING REMARKS ..................................................................................................................................... 10

List of Figures
Figure 1: Line Graph of the Profit per Quarter ............................................................................................................................ 4
Figure 2 Time Series Plot of the Numbers of Staffs And Middle & Senior Staffs ...................................................... 6
Figure 3 Time Series Plot of the Numbers of Staffs & Mgt. Staffs with Trend ........................................................... 6
Figure 4 Scatter-Plot of Profit vs. Revenue .................................................................................................................................... 8

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## [Type the document title]

Printout of the data in the sample:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.

+------------------------------------------------------------+
| id
quarter
staff
mstaffmsalary
revenue
profit |
|------------------------------------------------------------|
| 1
1
242
15
3.6
85.7
4.7 |
| 3
2
251
18
3.9
91.6
6.2 |
| 6
3
255
18
3.9
93.3
5.3 |
| 8
4
262
16
3.4
56.3
3.2 |
| 9
5
263
21
4.5
79.2
4.5 |
|------------------------------------------------------------|
| 11
6
262
20
4.3
63.4
3.6 |
| 12
7
267
23
4.9
58.1
3.3 |
| 13
8
260
22
4.7
73.9
4.2 |
| 15
9
263
24
5.2
72.2
4.1 |
| 17
10
265
24
5.1
77.4
4.4 |
|------------------------------------------------------------|
| 19
11
268
24
5.1
56.3
3.2 |
| 21
12
261
25
5.4
81
4.6 |
| 22
13
263
25
5.4
44
2.5 |
| 23
14
263
26
5.6
22.9
1.3 |
| 26
15
262
26
5.6
40.5
2.3 |
|------------------------------------------------------------|
| 27
16
268
27
5.8
22.9
1.3 |
| 29
17
228
13
2.6
21.1
1.2 |
| 33
18
228
13
2.6
43.3
3.7 |
| 34
19
221
15
3
32.8
2.8 |
| 36
20
233
15
3
29.3
2.5 |
|------------------------------------------------------------|
| 38
21
225
17
3.4
25.7
2.2 |
| 40
22
226
16
3.2
32.8
2.8 |
| 42
23
235
17
3.4
43.3
3.7 |
| 43
24
238
18
3.6
41
3.5 |
| 44
25
241
18
3.6
42.1
3.6 |
|------------------------------------------------------------|
| 46
26
235
17
3.4
44.5
3.8 |
| 47
27
241
18
3.6
39.8
3.4 |
| 51
28
241
18
3.6
53.8
4.6 |
| 53
29
248
19
3.8
44.5
3.8 |
| 54
30
245
18
3.6
65
5.6 |
|------------------------------------------------------------|
| 55
31
253
19
3.7
62
5.3 |
| 56
32
256
19
3.8
64
5.4 |
| 57
33
259
20
3.9
66
5.7 |
| 58
34
257
20
3.8
65
5.6 |
| 59
35
260
20
3.9
67
5.8 |
+------------------------------------------------------------+
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## Figure 1: Line Graph of the Profit per Quarter

From the graph we can easily understand that, after the 17thquarter the profit began to
increase again. We are taking this as the point at which the take-over was completed
and the new management team was in place.

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Staff Numbers
Table 1: Summary Statistics of staff numbers for the period of time before
the take-over.
Variable |
Obs
Mean
Std. Dev.
Min
Max
-------------+-------------------------------------------------------staff |
17
259
10.27132
228
268
mstaff |
17
21.58824
4.243507
13
27

Table 2: Summary Statistics of staff numbers for the period of time after the
take-over.
Variable |
Obs
Mean
Std. Dev.
Min
Max
-------------+-------------------------------------------------------staff |
18
241.2222
12.29326
221
260
mstaff |
18
17.61111
1.914001
13
20

These two summary tables illustrate that, both the mean staff numbers and mean middle &
senior management staff numbers has been decreased from the period of time before the
take-over to the period of time after the take-over. Average stuff numbers decreased from
259 to 241 and middle& senior management staff numbers decreased from 21.59 to 17.61.

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Time series plot of the staff numbers:

Number of Staffs

## Number of Middle & Senior Staffs

Figure 2 Time Series Plot of the Numbers of Staffs And Middle & Senior Staffs

The time series plot says us, here exist increasing trends in the numbers of both staffs and
management staffs; but after take-over, the new management cut off many of their old
employees.
300

Number of Staffs

250
y = -0.4471x + 257.9
R = 0.1016

200
150
100

y = -0.0751x + 20.894
R = 0.0412

50
0
1

staff

9 11 13 15 17 19 21 23 25 27 29 31 33 35
mstaff

Linear (staff)

Linear (mstaff)

Figure 3 Time Series Plot of the Numbers of Staffs & Mgt. Staffs with Trend

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Using the time series plot and the trend lines it is comprehensible that the take-over has
changed a lot in the employee pattern of Solidon. earlier to its takeover Solidons number of
staffs and management staffs were increasing, so as their operational cost (Salary).
Immediately before the takeover the number of staffs and management staffs were 268 and
27 respectively. But, subsequent to its takeover the new management cut off old inefficient
employees, so as their redundant operational cost (Salary).
Thats why instantly after the takeover the number of staffs and management staffs of
Solidon become 228 and 13 respectively. So, we can say the employee cut-off was a very
sudden decision of the new management.

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## Revenue and Profit

20

40

60
Total revenue, in \$1,000,000

80

100

## Figure 4 Scatter-Plot of Profit vs. Revenue

The scatter plot shows an upward flow and a positive relationship between Revenue and
Profit for Solidon. The correlation coefficient indicates the strength and direction of a linear
relationship between two variables. Thats why, in order to measure the strength and
direction of association between Revenue and Profit for Solidon in the sample, I have used
correlation:
. correlate profit revenue
(obs=35)
|
profit revenue
-------------+-----------------profit |
1.0000
revenue |
0.8265
1.0000

The statistics shows that, association between Revenue and Profit for Solidon is strong and
positive (.827). So, we can say that, the higher the Revenue is, the higher the Profit will be.

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The Regression Output:
Source |
SS
df
MS
-------------+-----------------------------Model | 41.5737002
1 41.5737002
Residual | 19.2822993
33 .584312099
-------------+-----------------------------Total | 60.8559995
34 1.78988234

Number of obs =
35
F( 1,
33) =
71.15
Prob> F
= 0.0000
R-squared
= 0.6831
Root MSE
=
.7644

-----------------------------------------------------------------------------profit |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
-------------+---------------------------------------------------------------revenue|
.0545647
.0064688
8.44
0.000
.0414038
.0677256
_cons |
.8552672
.3744752
2.28
0.029
.0933916
1.617143
------------------------------------------------------------------------------

The equation of the regression line which could be used to predict the Profit of Solidon
from the Revenue of Solidon is:
Profit = .85527 + .0546 (Revenue)
Here Predictors are: (Constant) &Total Revenue (in \$1,000,000), and Dependent Variable
is: Profit (in \$1,000,000).
R-square measures the proportion of the variation in the dependent variable (wage) that
was explained by variations in the independent variable(s). In this sample, the "R-Square"
is 0.6831 and telling us that 68% of the variation was explained. On the other hand,
Standard error of the estimate measures the dispersion of the dependent variable(s)
estimate around its mean (in this sample, the Std. Error of the Estimate is .00647).
Here the gradient or slope of the regression line is .0546. This means if the independent
variable (Revenue) increased by 1 unit then the dependent variable will be increased by
0.0546 units.
In this case the constant or intercept value is equal to .85527 and this is significant at 95%
confidence level. Here the p-value for the constant is 0.029 which is smaller than 0.05.
Thats why we can say it is significant at 5% level.
Here, the p-value for the regression model is 0.000 (F (1, 33) = 71.15). Thats why we can
tell indisputably that this regression model is excellent and significant.

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