Business Analytics and Data Visualisation (ECOM5005) Assessment 3 Semester 1, 2024

Revenue growth holds a vital position for businesses, regardless of their size. It stands as a critical measure of a company's financial health because revenue is used to spend on future development and return money to investors, as well as paying operating expenses. Measuring revenue against marketing  and  sales  promotions  and  to  benchmark  against  the  revenue  being  made  by  a company’s competitors is also critical for evaluating successful activities of the organization.

As a market analyst, you would like to explore the factors influencing a company’s revenue generation and its growth potential. The following variables have been collected from Capital IQ database for the same company dataset used in Assessment 2. The data is stored in the Excel file “2024_Sem1_Capital_IQ_data.xlsx”. Please note that the data file is not completely cleaned and in order to complete a multiple regression analysis you may need to use proxy values for “0” (zero) or missing values.

.    Total Revenue, 1 Yr Growth % [FY 2023]: the percentage of revenue growth over one year, from financial year 2022 to financial year  (FY) 2023.

.    Total Debt/Equity %: refer to the debt-to-equity ratio (D/E ratio) for FY 2023. It is calculated by dividing a company’s total debt by its total shareholder equity.

.    Inventory Turnover for FY 2023: is determined by diving the cost of goods sold by the average inventory value over one year. The inventory turnover metric assesses the effectiveness that a company manages its inventory. A relatively low inventory turnover  ratio could suggest sluggish sales or surplus inventory, whereas a higher ratio indicates robust sales but might also point to insufficient inventory management.

.    Return on Equity for FY 2023: is a financial ratio that measures the performance of a company based on its shareholders' equity outstanding. It is determined by dividing net income by shareholders' equity. Return on Equity (ROE) serves as an indicator of a company's profitability and its effectiveness in generating earnings. A higher ROE signifies more effective management in generating income and growth through equity financing

.    % Stock Price Change [1 Year]: is measured as the percentage change in a company stock price between financial year 2022 and financial year 2023.

REQUIRED

Utilizing the provided data, your task is to conduct a regression analysis to identify a relationship between revenue growth and the other variables available for this sample of companies. This analysis will help address the following questions.

1.   Use words to explain the regression model you are using with reference to the formula which can be written for a multiple regression analysis?

2.   Which variable(s) have the strongest relationship with revenue? Explain whether revenue is the dependent variable or independent variable of the regression model in your answer and use the coefficient measures of each of the other variables to explain their relationship with revenue.

3.   Is  the regression model useful for predicting the effect  of other financial variables on revenue growth?

DUE DATE AND LATE PENALTY

Your video presentation is due on the date and time identified in the Unit Outline “Program” calendar

.    You should upload the video presentation to Echo360 and submit its public website link via Blackboard. Please see the following file for details.

“ECOM5005_Instructions_upload_video_Echo360_and_BBsubmission.pdf”

.    A copy of your Excel workings is required to submit with the Echo360 link of your video presentation.When  submit  to  Blackboard,  the  name  of  your  Excel  file  should  be:

“YourStudentID_LastName_Excel_workings.xlsx”

.    Please note the penalties that apply to late submission are explained in your Unit Outline for this unit. Make a special note that penalties like 5%  or 10% apply to the total marks    for the  assessment. For example, a 5% penalty for submitting up to 24 hours late means losing 5% of 25 marks, or 1.25 marks. A 10% penalty per day after that means losing another 2.5 marks per day in this case. The penalty is not measured from your final score.

Mark allocation of the video presentation:

Please refer to the marking rubric available later in semester for how the 25 marks is allocated for your Business Report. In advance, we can advise that you will have 10 marks awarded for the content related to performing the regression analysis in Excel, correctly answering the three questions in the “Required” section above, with 15 marks allocated for a logical and interesting presentation with Excel analysis shown in the slides and analysis of the results explained fully. This gives a total of 25 marks