15 Apr In the last assessment, you were asked to prepare the first part of your analytics report by creating graphs and calculating some descriptive statistics. In this assessment, you will
In the last assessment, you were asked to prepare the first part of your analytics report by creating graphs and calculating some descriptive statistics. In this assessment, you will write your 4-6 page analytics report by interpreting those graphs and statistics, and explicitly connecting those interpretations to implications in the practical business context.
The first step in creating meaningful information from raw data is to represent the data effectively in graphical format and to calculate any required statistics. The second step is interpreting and explaining those graphs and statistics in order to apply them in the business context.
In the previous assessment, you were asked to create the first part of your analytics report by preparing graphs and calculating some descriptive statistics. In this assessment, you will complete your analytics report by interpreting those graphs and statistics, and connecting those interpretations explicitly to implications in the business context.
In business and applied analytics, oftentimes you are interested in drawing conclusions about a population of interest. However, it may not be feasible or practical to gather data on the entire population. In those cases, data is gathered from a sample or subset of the population. Analyses done on the sample are then used to draw inferences regarding the overall population; this mathematic process is referred to as inferential statistics. In this assessment, we begin discussing the topics of sampling and drawing inferences.
All the inferential statistical techniques and methods covered in this course are considered parametric techniques and require certain assumptions to be used and for the results to be reliable, many of which are assumptions about an underlying distribution. Nonparametric techniques require no assumption about underlying distributions and are often used when the assumptions of parametric techniques are not met. Although these are beyond the scope of this introductory course, they are a great option for additional reading and research.
Analytics projects often result in two distinct types of reports or summaries: one tailored to the executive level, which takes the form of a presentation, and the other, a detailed analytics report, which documents an analysis so thoroughly that another analyst can reproduce the analysis exactly. Many times, the latter type is referred to by other departments or analysts wishing to conduct a similar analysis on similar data or by the same analyst who wants to repeat the analysis on a new or revised set of data. In this assessment, you will learn the essential elements that should be included in a report at this level of detail and you will create your own analytics report addressing the business problem you have been working on.
Scenario
The first step in creating meaningful information to develop a business report for decision making. The business report includes the analyzed raw data, effectively presents the analysis results in text and graphical format, as well as calculate any required statistics.
The second step is interpreting and explaining the graphs and statistics to understand the impact in the practical business context.
In the last assessment, you were asked to create the first part of your business analytics report by introducing a company, analyzing company stock data, developing graphs, and calculating some descriptive statistics.
In this assessment, you will adjust your business report to minimize limitations of one year’s worth of data. You will use the same company for this assessment and you will use 5 years of data!
You will also enhance your introduction or business context section of your business report based on your new graphs and your interpretation of the data graphs and descriptive statistics over a five year period. Your interpretation efforts of graphs and descriptive statistics will explicitly connect in the conclusion area. Conclusions and recommendations are the final effort in the development of a practical business report and should be supported by citations. Remember that opinion is not allowed.
Your Role
Your supervisor has asked you to prepare a report for the quarterly company meeting. The first part of the task was to download the data and create scatterplots and histograms, and to calculate mean, median, and mode of 5 years of stock prices for your report. Now you must analyze and interpret those graphical representations of the company stock and write the report of your findings and recommendations for your supervisor.
You are an analyst using the same company and five years of stock data. Having accessed the company data and placed it in an appropriate graphical format, you must now use descriptive statistics and analysis to develop a report to inform business decisions.
Instructions
After reviewing and integrating your instructor’s feedback on your previous Assessment, complete the report as follows:
- For each graph you created, write at least one well supported paragraph interpreting the graph: What does that graph represent? What does the shape of the graph tell you about how the data have changed over time?
- For each statistic you calculated, include at least two to three well-supported sentences explaining what the statistic represents:
- What does the mean tell you? How do you know?
- What does it imply if the median is different from the mean?
- What does the standard deviation tell you about the volatility of the data?
- Write a new conclusions section in which you explain how these interpretations can be used in the company:
- What are some trends about which company leaders should be aware?
- How might the information you have provided be used in decision making in the company?
- What are other analysts indicating about the stock?
- Explicitly connect other analysts’ comments and recommendations to your interpretations to possible impact to the business context
- Lastly, should your company invest of partner with the company or stock being evaluated?
Create a 4-6 page report containing:
- APA-formatted title page.
- 1-2 page introduction of your chosen company that you created in your previous assessment.
- Section labeled Graphical Representations of Data that includes the four graphs you created as well as your interpretations of the graphs.
- Section labeled Descriptive Statistics, with the statistics you calculated as well as your interpretations of the statistics.
- One-page conclusion in which you describe the potential business applications of the data and interpretations.
- APA-formatted references page (remember to cite the source of your financial data, analyst comments and support for your interpretations).
Example Assessment: You may use the following to give you an idea of what a Proficient or higher rating on the scoring guide would look like:
Running head: APPLYING ANALYTIC TECHNIQUES TO BUSINESS 1
Copyright ©2019 Capella University. Copy and distribution of this document are prohibited.
Applying Analytic Techniques to Business
Learner’s Name
Capella University
Applied Business Analytics
Applying Analytic Techniques to Business
April, 2019
APPLYING ANALYTIC TECHNIQUES TO BUSINESS 2
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Microsoft Corporation
Microsoft is one of the world’s leading IT firms. With constant growth in its offerings,
Microsoft currently develops and licenses computing software, services, devices, and solutions
worldwide (Yahoo Finance, 2019). Some of Microsoft’s prominent offerings include Microsoft
Windows, which constitutes 35.5% of the market share for operating systems as of March 2019
(StatCounter, 2019), Office 365 Commercial Products and Services, available through cloud
technology, and Microsoft Azure, a cloud platform for data storage and analysis (Yahoo Finance,
2019).
Although software has been the basis of Microsoft’s success previously, in 2013, under
the leadership of Steven Anthony Ballmer, the company announced a shift in focus toward the
production of devices and services (Belanger, 2018). Consequently, there was an increased in
production of phones, tablets, personal computers, and gaming hardware including as Xbox. This
shift, however, was unsuccessful, largely because Microsoft’s strategic acquisition of all of
Nokia’s Devices and Services business proved a significant failure (Belanger, 2018).
The change in leadership from Ballmer to Satya Nadella in 2014 redirected the company
to profitable growth with a shift in focus toward business technological services and cloud
computing (Belanger, 2018). The acquisition of LinkedIn, the development of Office 365, and
the launch of Microsoft Azure generated significant profits for the company in the recent years
(Belanger, 2018). For the past 5 years, Microsoft leadership has witnessed an average growth
rate of 1.4%, and the company leaders are optimistic about generating a 7.5% increase in profits
in 2020 (Simply Wall ST, 2019). What makes Microsoft’s future really promising is its current
standing; Microsoft generated a revenue of close to 32.5 billion U.S. dollars and a profit of 8.6
APPLYING ANALYTIC TECHNIQUES TO BUSINESS 3
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billion U.S. dollars owing to a 76% increase in the sales of Azure and a 39% increase in sales of
surface tablets and laptops (Weise, 2019).
Graphical Representations of Data
Interpreting the Scatterplots
Figure 1.1. Scatterplot of highest stock prices of Microsoft based on data from Yahoo Finance (2019)
Figure 1.1 depicts the trend in the highest stock prices of Microsoft from February 2018
to February 2019. The graph explains the relationship between two variables: highest stock
prices (in U.S. dollars) on the y-axis, which is the dependent variable, and time (in days) on the
x-axis, which is the independent variable. The scatterplot is linear: The highest stock prices show
an approximately positive relationship with time in 2018. The highest stock prices for Microsoft
increased in value in 2018. However, the relationship is moderately strong, as there is no
significant increase in the value of the highest stock prices with time and there have been small
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APPLYING ANALYTIC TECHNIQUES TO BUSINESS 4
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drops in prices toward the end of 2018 and subsequent rises in February 2019. There is a
noticeable absence of significant outliers.
Figure 1.2. Scatterplot of lowest stock prices of Microsoft based on data from Yahoo Finance (2019)
Figure 1.2 presents the trends in Microsoft’s lowest stock prices from February 2018 to
February 2019. The graph depicts the relationship between lowest stock prices (in U.S. dollars)
on the y-axis, the dependent variable, and time (in days) on the x-axis, the independent variable.
The scatterplot presents a moderately positive relationship between the lowest stock prices and
time. The value of the lowest stock prices increased for approximately seven months from March
to October, with small drops and recoveries between October and December. The scatterplot
takes a positive linear form with a small slope, indicating low volatility in the lowest stock
prices. The scatterplot also helps us understand that there are no significant outliers, which
confirms the stability of Microsoft’s market shares.
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APPLYING ANALYTIC TECHNIQUES TO BUSINESS 5
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Interpreting the Histograms
Figure 2.1. Histogram of adjusted closing stock prices of Microsoft based on data from Yahoo Finance (2019)
Figure 2.1 presents the number of occurrences of daily adjusted closing stock prices
falling within equally distributed continuous data ranges. The ranges of adjusted closing stock
prices are marked on the x-axis, and the number of occurrences of prices falling within the
ranges of adjusted closing stock prices is marked on the y-axis. The histogram is skewed to the
left; that is, a majority of the data points fall within the higher ranges of daily adjusted closing
stock prices. This indicates that the histogram is negatively skewed with the median being
greater than the mean, indicating volatility in the adjusted closing stock prices of Microsoft in the
market.
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APPLYING ANALYTIC TECHNIQUES TO BUSINESS 6
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Figure 2.2. Histogram of stock volume of Microsoft based on data from Yahoo Finance (2019)
Figure 2.2 presents the number of occurrences of Microsoft’s daily stock volumes being
bought or sold within continuous data ranges. The ranges of stock volume are marked on the x-
axis, and the number of occurrences of stock volumes falling within the ranges is marked on the
y-axis. The histogram is skewed to the right, indicating that a majority of the daily stock volume
data points fall within the lower ranges of the stock volume. This indicates that the histogram is
positively skewed with the mean being greater than the median. With 80% of the data points
falling within the lower ranges of stock volume, the histogram is strongly skewed to the right,
indicating unequal distribution and difficulty in speculating the daily stock volume of Microsoft.
Descriptive Statistics
Mean, Median, and Standard Deviation of Adjusted Closing Stock Prices
The mean, or the average value of a data set, of Microsoft’s adjusted closing stock prices
is 101.939 U.S. dollars, indicating the healthy market standing of Microsoft’s stock. It is
indicative of the company’s stable growth in revenue and profits throughout the year.
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APPLYING ANALYTIC TECHNIQUES TO BUSINESS 7
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While mean is the average value of a data set, median is the data point that corresponds to
the middle value in the data set. The median for Microsoft’s adjusted closing stock prices is
103.249 U.S. dollars, which is greater than the mean, indicating the presence of outliers on the
lower side of the stock prices; this highlights the prevalence of fluctuations in Microsoft’s stock
value. This difference in mean and median also indicates asymmetry in the distribution of values
for adjusted closing prices. The standard deviation for the adjusted closing stock prices is 6.953
U.S. dollars; considering that the average stock price is 101.939 U.S. dollars, the volatility is
6.7%. The standard deviation is representative of the volatility in the stock pricing and, therefore,
helps understand the level of risk involved in investing in a stock. The standard deviation
suggests the prevalence of moderate risk in purchasing Microsoft’s shares.
Mean, Median, and Standard Deviation of Daily Traded Stock Volume
The mean of Microsoft’s daily traded stock volume from February 2018 to February
2019 is 31,210,598, which is indicative of the high liquidity of the company’s stock (Seth, 2018).
Considering that a stock that is traded at fewer than 10,000 shares each day is deemed a low-
volume stock (Seth, 2018), Microsoft’s daily traded stock volume is representative of a large
number of prospective buyers and, therefore, a highly valuable publicly traded firm. The median
for the stock volume is 28,123,200, which is less than the mean. This indicates the presence of
outliers on the higher side of the data set and, therefore, shows that the company has significant
spikes in its daily tradable stock volume. The standard deviation is found to be 12,909,909.8,
which is equivalent to 41.3% of the mean for stock volume. A standard deviation of
12,909,909.8 is representative of high volatility in the data set, which shows a considerable lack
of consistency in the volume of Microsoft’s stock.
APPLYING ANALYTIC TECHNIQUES TO BUSINESS 8
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Conclusion
The graphical representations and statistical calculations of Microsoft’s stock history
gives valuable insights that could help management make decisions about the launch of new
products and expansion. Some important trends that leaders should be aware of are as follows:
• While there is a gradual rise in the highest and lowest stock prices for the second and
third quarter, the fourth quarter is characterized by moderate falls and recoveries in the
highest and lowest stock prices;
• More than one fourth of the adjusted closing stock prices fell within the high-value range
of 105 to 110, which is a signal of high demand;
• A volatility of 41.3% for daily traded stock volume indicates great unpredictability in the
exchange rate of Microsoft’s stock. High volatility in stock volume usually indicates
unexpected earnings by a firm or the dissemination of good or bad news about the
firm/industry in the market (Morah, 2018).
Awareness of trends in stock prices may help management decide to launch products or
upgrade offerings in the early and later parts of the year, which may create hype and push sales
during these periods; this may facilitate a further increase in gross revenue and profits during the
stable periods of the third and fourth quarters. The histogram for adjusted closing stock prices
shows that a large number of data points fall within the high-value range of 105 and 110 U.S.
dollars with significant stock volume exchanged daily. This may inspire management to double
stock volume by halving stock prices, which may help increase the demand for the stock and,
therefore, improve market capitalization for the company.
The scatterplots for the highest and lowest daily stock prices indicate a positive linear
correlation between time and stock value, which helps understand the impact of the improved
APPLYING ANALYTIC TECHNIQUES TO BUSINESS 9
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growth in Microsoft’s revenue in 2018 compared with preceding years. The scatterplots also
indicate better valuation of prices in the start of 2019 than in 2018; this demonstrates the impact
of the company’s quarterly performance, namely generating 32.5 billion U.S. dollars in revenue,
on its market valuation at the start of 2019. Interpreting the histograms helps understand that
while the median for adjusted closing stock prices was relatively on the higher range of the data
set, the median for stock volume was on the lower range of the data set, reflecting high demand
for Microsoft’s stocks and, at the same time, a reservation on the part of Microsoft’s
shareholders to sell. This trend coincides with the fact that Microsoft, during the period,
improved in its distribution of dividends (Weise, 2019), which could be why the rate of change
in Microsoft’s traded volume was lower than the rate of change in its stock pricing.
APPLYING ANALYTIC TECHNIQUES TO BUSINESS 10
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References
Belanger, L. (2018, April 4). 10 amazing moments in Microsoft’s history, from its founding to
desktop dominance to today. Entrepreneur India. Retrieved from
https://entrepreneur.com/article/311468
Morah, C. (2018, March 2). Are stocks with large daily volume less volatile? Retrieved from
https://investopedia.com/ask/answers/09/daily-volume-volatility.asp
Seth, S. (2018, January 10). The risks of trading low-volume stocks. Retrieved from
https://www.investopedia.com/articles/active-trading/051415/risks-trading-lowvolume-
stocks.asp
Simply Wall St. (2019). Microsoft Corporation (NASDAQ: MSFT): What does the future look
like? Retrieved from https://simplywall.st/stocks/us/software/nasdaq-
msft/microsoft/news/microsoft-corporation-nasdaqmsft-what-does-the-future-look-like/
StatCounter. (2019). Operating system market share worldwide. Retrieved from
http://gs.statcounter.com/os-market-share
Weise, K. (2019, January 30). Releasing earnings, Microsoft stays in stride, with cloud powering
the way. The New York Times. Retrieved from
https://nytimes.com/2019/01/30/technology/microsoft-
earnings.html?rref=collection%2Ftimestopic%2FMicrosoft%20Corporation
Yahoo Finance. (2019). Microsoft Corporation (MSFT) [Data set]. Retrieved from
https://finance.yahoo.com/quote/msft/profile/
,
5
Using Analytic Techniques to Add Meaning to Data
Students Name
Professor’s Name
Course
Date
Nike Company Stock Price
Introduction
As the world’s largest athletic apparel entity, Nike is one of the leading footwear, equipment and apparel corporation globally. It was founded as a Blue Ribbon Sport in 1964 and became the Nike it is today in 1971 after the victory Greek goddess. The term Nike was derived from the Greek name Greek goddess of victory, which, since it was established, has experienced numerous achievements in the footwear market. It has grown to be one of the most successful sports businesses in the world and currently employs more than 76000 individuals across all its operational stores globally (Yao & Chen, 2019). The entity offers its products through its Nike brand and its subsidiaries, including the Converse and Jordan brands. It sponsors the most significant sports and athletes teams across the globe, including Serena Williams, Alex Morgan, LeBron James and Rafael Nadal. Nike Company, as the most recognizable sports brand in the world, manufactures, markets and sells sports-related products to the global market. The organization is headquartered in Oregon near Beaverton and within the metropolis of Portland. Following its fiscal year ending May 2022, the company made more than $44.54 billion in revenue. Its brand currently stands at the value of $32 billion, representing the most valuable sportswear business in its industry.
Marketing Mission and Vision
Generally, the one company that is more likely to appear in one’s mind when it comes to sports products like shoes is Nike. Its strong mission statement has dramatically contributed to establishing the entity’s brand in people’s minds. It has aligned its mission and vision statement with its primary goals and strategies. Its mission statement can be described by three main aspects: creating innovation and inspiring and supporting athletes globally. The company’s mission statement is “to bring inspiration and innovation towards every athletes in the globally (Wondershare, 2021).” On the other hand, the company’s vision statement is “to remain the most authentic, connected and distinctive brand ever.” It uses inspirational words like “everyone with a body is an athlete,” which aligns with its mission. Such inspirational phrases or messages enhance its sales in the local and global markets. The company’s marketing plan transverses numerous guidelines and objectives on timelines. Through its marketing strategies, the company reported that it targets to increase its annual profits by 10 percent in the current year. This is a 25 percent raise in return on invested capital, raising its dividends to 35 percent (Freixo, 2023). The vision of Nike is based on creating innovative thinking in product manufacturing and enhancing its athlete’s abilities. In other words, the company aims to manufacture innovative products that put its brand ahead of advanced technology and innovation strategies. Nike’s products are often targeted toward athletes and sports events.
Sales
Nike has experienced consistent fluctuations in sales and revenue over the past few years. Following the most recent annual report, the company collected more sales and revenues in the first and fourth quarters than in the second and third quarters. The company’s sales and revenues were often made from its numerous products related to sports and also non-sporty items. It has attained flexibility associated with demographic changes, trends, preferences and styles. Based on recent past years, the company recorded a total revenue of $39.12 billion, $44.53 billion and 46.71 billion in 2020, 2021 and 2022, respectively. Following the revenue trend over the recent past periods, the company has consistently improved sales. It faced a significant decline in 2020 due to the impact of covid-19.
Having operated more than 122 footwear entities across 12 countries, Nike is surrounded by stiff competition pressure from rival companies like Adidas, Reebok, Converse, Fila and Puma. Nevertheless, the company has taken significant steps to remain on top of its main competitors. One of the approaches used by the company has been cost management. The company's manufacturing operations and activities are often conducted outside the United States. This is a competitive advantage for the entity as it operates in countries where production costs are low. Lowering production costs helps the company widen its profitability margin, maximizing its profits. Other competitive advantages that hold the company at the top position include its famous and well-established brand, strong social media followers and international popularity.
Graphical Representation of Data
Scatterplot of the Highest Stock Price
Data and high columns were selected to prepare the scatterplot for the company’s highest stock price. On the Excel tab, click insert, followed by the option of the scattered graph under the chart slot. After clicking ok, a pave will open, and it is here where the scatterplot is generated. The title is then formatted based on the company’s values and the labelled axis. After completing the graph, it was copied from the Excel file and pasted into the word file.
Scatterplot of the Lowest Stock Price
When developing the scatterplot of the lowest stock price for the company, date and low columns were selected. The insert option is clicked on the Excel tab, and the scatterplot option under the charts slot is selected. After clicking the scatterplot option, a pave gets opened, and it is here where the scatterplot is generated, formatted and labelled. The complete scatterplot is then copied from the Excel file and pasted into the word document.
Histogram of the adjusted daily closing stock price
When creating the adjusted daily closing stock price histogram, the adjusted close columns were selected in the dataset. The insert option was clicked on the Excel commands tab, followed by the histogram option under the charts slot. This opened a pane where the histogram was then generated. The title is then formatted, and the axis is labelled. Besides, the gridlines and tick marks are removed, after which the graph is copied from the Excel file and pasted into the Word document.
Histogram of the stock trading volume
When developing the company’s stock trading volume, the volume column in the data set was selected. On the excel command tab, insert option was clicked followed by the click on the histogram option. The pane was opened after clicking on the histogram option where the histogram was generated to its completion. The complete graph was then copied and pasted from the excel file to the word document.
Descriptive Statistics
Some of the significant elements included in the descriptive statistics included the mean, mode, median and the standard deviation related to the adjusted daily price of the company’s daily closing.
|
Statistic |
Value |
|
Adj Close |
|
|
Mean |
105.6364523 |
|
Standard Error |
1.16804876 |
|
Median |
100.656334 |
|
Mode |
126.129288 |
|
Standard Deviation |
18.54219923 |
|
Count |
252 |
In creating the descriptive statistic table, the data analysis tool was clicked in the Excel workbook tab. The first dialogue box was opened up, where the descriptive statistics were chosen. This was by clicking, which was followed by another dialogue box that popped up. This was utilized in selecting the data whereby the adjusted close data were highlighted. The option of summary statistics was established, followed by the output generation.
Calculation of the mean, median, mode, and standard deviation of the company’s stock volume
|
Statistic |
Value |
|
Volume |
|
|
Mean |
7399826.98 |
|
Standard Error |
