Based on pattern recognition (see Figure 1), it seems that every fourth quarter in each year has the highest sales revenue, and there appears to have a decreasing trend. To confirm this, we will create different statistical models, first using the three dummy variables and then incorporating external conditions such as CPI and disposal income. Lastly, we will use the best fit model to develop our expectation for 2015’s revenue.
From the above regression statistics (see Figure 2), since adjusted R^2 = 0.05, significant low, there is no association between the years and sales according to the simple regression model because only 5% of the variation in revenue can be explained by the quarters. Therefore, it’s unlikely that trend is an accurate
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The first one that we choose is S&P 500 because we want to see if there is a direct relationship between the stock market and consumers’ purchasing behaviors. Since S&P 500 is a American stock market index based on the market capitalizations of 500 large companies, we choose it as an economic variable to see if it will influence buyer behaviors in Sears’ revenue.We use Fred Economic Data as our primary resources to find the S&P 500 index , and we choose the median among the data to represent our quarterly data. Based on the regression output above ( See Figure 4), although the overall model is useful with F=0, the p value for S&P 500 is 35% greater than α=0.05(assumed). Thus, adding the S&P 500 economic factor does not provide a better regression model in comparison to the dummy variable regression model we present …show more content…
Since they only provide monthly index, we take the median among the monthly data to represent our quarterly data. We are expecting a positive correlated relationship between disposable income and the sales revenue because when people have more disposable income, they are more likely to increase spending or vice versa. There is a economic theory called “ marginal propensity to consume”, which means that the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it. Therefore, from an economist's perspective, there is an association among the consumption and income. Refer back to the regression analysis (See Figure 6), the new model’s adjusted R square is 99% which means 99% of the variation in revenue can be explained by variables including trend, spring quarter, fall quarter, winter quarter, and disposable income. By looking at the coefficient of disposable income, and it indicates that for every additional in disposable income; one can expect the sales revenue to decrease an average of 1.37 dollars with holding other predictors constant. Therefore, according to the new model, there is actually a negative relationship between the disposable income and sales’ revenue. The overall model is significant with F=0. Since the p values are all less than α=0.05(assumed), and the adjusted R^2
Sears has created a “Financial Crisis” when hedge fund manager Edward Lampert took over control of the company. The mentality of investors of a CFO is an important viewpoint during crisis because it can help streamline process and reduce cost. Retail experience should be dominant the retail in order to feel the pulse of the consumer desires and to determine proper margin levels while eliminating inefficiencies in the organization. According to Marina Strauss of the Globe and Mail, “a sweeping change will be required to improve the retailer’s outlook”. She quoted the (CEO of Sears-Canada) Mr. McDonald saying in a memo that “Our store are too difficult to shop in. We have inconsistent execution…We do not offer the right product in the right market” (STRAUSS M., 2011).
... 10 years from now. In the chart below you can see that we believe that our sales will double each year.
According to Payne (2014), the U.S. economic growth will strengthen in this year with an average of 2.7 percent because of various factors including the strengthening of consumer and business confidence. The other factor that will contribute to the strengthening of the country’s economic growth is Europe’s emergence from its long slumber, a trend that will brighten the prospects of foreign sales. However, this economic growth will largely be limited by ongoing government deficit reduction. As compared to the first half of 2013, economic conditions are already better since growth increased with an average of 3.7 percent in the second half of 2013. Consequently, expectations of increased economic growth in the United States are rising as people believe that this will be the best year since the tribulations of 2008 global recession. Generally, America’s GDP growth will become stronger in 2014 averaging at least 2.7 percent becaus...
Quarterly GDP changed a good amount during 2000-2001. Although the numbers changed throughout both years, there was not a recession. A recession is when there are two consecutive down terms. If there was a recession, the easy money policy would be put into affect. This is discussed along with the Discount Rate.
Excellent growth up until the most recent year. Sales dropped from 1984 to1985. A new product introduced in 1986 is forecasted to boost sales.
This paper analyzes the main economic indicators related specifically to one of the largest pharmaceutical company Pfizer, Inc such as overall performance, revenue, net income, research and development, cost and expenses. There are certain economic indicators that do not apply to individual companies, but influence their economical forecasts. Such factors as inflation and unemployment rate pertain to an industry or region and such factors as political instability or any force major conditions will affect the market analyses even they are not an economic indicators. There are many more factors that affect economic predictions and their detailed analyses are presented in http://www.economic-indicators.com, web site for tracking US economy.
1. Context: In early September’08 Giant Consumer Products, Inc. (GCP) realized that Frozen food division, which had been growing at 2.8% (compounded annual growth) rate since 2003 to 2007 and accounted for almost 33% of GCP’s overall business volume, is not doing well now. The sales as well revenue volume is around 3.9% behind the target. Most specifically marketing margin (key parameter for GCP business) was also under plan by 4.1%. GCP had been doing well in wall-street but performance of past couple of quarters has increased the worries of GCP i.e. whether GCP will able to maintain its profitable growth.
What core competencies do you think the company has and what is needed to exploit opportunity and counter threats.
We are using October 2006 as the base for our forecasted sales due to the many changes that have occurred in the last year. Several product lines have been ...
Don Bradish was recently hired to fix scheduling issues with the new company in which he works, The Fitzgerald Machine Company. There are a few relevant facts that were given in this case study. The first and foremost fact is Mr. Bradish was hired because the company is having issue with their scheduling. This is important because he comes in with a relevant degree and years of experience with a reputable company. He is going to be looked for to find a solution to the issue outlined in the case study. The second relevant fact in the case study is that the company that The Fitzgerald Machine Company is working with is having labor issues. This is considerable because the $300,000 order is a considerably large
Poor organizational management, failure to innovate and adapt to the environment, and an outdated brand image have all contributed to Sears massive decline. By not setting a clear organizational strategy, executives of Sears strayed away from innovation, allowing for competitors to attract Sears loyal customers to their organization. In addition, the outdated brand image of Sears has failed to meet the ever changing customers of today’s society. Overall, there are many reasons that have led to the downfall of a once powerful retail giant.
Charles Chocolate’s sales revenue decreased -1.176% between the years 2010 and 2011. The equation that as used to get that was Revenue Growth= 100 × (Current Value-Prior Value/Prior Value) 100 × (11,850,480-11,991,558/11,991,558). The change in the sales revenue could have happened for very many reasons. Being a premium chocolate making company, their product may not have been very high in demand. Also forecasting the demand for their product was not a very easy thing to do either. Another issue that Charles Chocolate’s faced their competitors, such as Godiva and Lindt, are more of a well known brand then they are.
Although revenues declined in 1999, net income increased by 13% over the prior year. As the graph below illustrates, net income has been volatile in the latter half of the 90's.
Sears has seen many different changes in business and has had to adjust to t...
While both companies belong to the retail industry (where sales of products and services are the source of business), Sears and Wal-Mart have very different business models.