quantive analysis of economics and finance

Description

PLEASE USE THE TABLE OF 100 FIRMS UPLOADED IN THE FILE FOR THE REPORT Part 1 (40%): Discussion of sampling methods and data handling (1,000 words). You are required to examine financial characteristics of UK non-financial firms in 2018. To do that, you need to select a sample of 100 UK publicly listed non-financial firms from FAME Database. You need to use a sampling method that you believe is appropriate in this assignment’s context. All your selected companies should be firms in FTSE All Share Index and should exclude firms in the financial sector (such as banks and insurance companies. These can be found under BvD Sectors: 32 – Banking, Insurance & Financial Services). Please note that the sample should be collected by each of you individually to avoid any potential collusion. YOU CAN USE EITHER EXCEL OR SPSS TO CONDUCT ANALYSIS FOR YOUR ASSIGNMENT. IF YOU ARE WORKING WITH SPSS, YOU CAN USE THIS FILE TO SELECT A (RANDOM) SAMPLE OF 100 FIRMS WITH CALCULATED RATIOS: FTSEALLSHARE_SPSS FILE_Select 100 Companies WITH RATIOS.sav IF YOU ARE WORKING WITH SPSS, YOU CAN USE THIS FILE TO SELECT A (RANDOM) SAMPLE 100 FIRMS WITH CALCULATED RATIOS: FTSEALLSHARE_EXCEL FILE_Select 100 Companies WITH RATIOS.xlsx THIS FILE SHOWS THE STEPS FOR THE ANALYSIS USING EXCEL: FTSEALLSHARE_AllFirms_ANALYSIS Example.xlsx PLEASE NOTE THAT YOUR COMPANIES SHOULD BE SELECTED USING ONE OF THE RANDOM SAMPLING METHODS (SIMPLE RANDOM, SYSTEMATIC RANDOM, STRATIFIED RANDOM). PLEASE USE THESE FILES TO HELP YOU WITH THE STRUCTURE OF THE REPORT: Assignment Structure Part 1_2020.docx Assignment Structure Part 2_2020.docx Ratios Description.docx Collect data from each selected company in 2018 for the following variables: 1. Company Name 2. BvD Sector – sector a company operates in 3. UK SIC Code – Primary UK SIC (2007) code 4. One Measure of Firm Profitability:  Return on Total Assets (ROA) OR  Return on Capital Employed (ROCE) OR  Profit Margin Collect data from each selected company for any TWO of the following variables ONLY: 5. Firm Size: Turnover (Sales) 6. Asset Growth: Total Assets in 2017, Total Assets in 2018 7. Liquidity (Current Ratio): Current Assets, Current Liabilities 8. Tangibility: Tangible Assets, Total Assets 9. Debt Ratio: Long-Term Debt, Total Assets Perform the following tasks in IBM SPSS Software – IF YOU ARE USING THE (SPSS OR EXCEL) FILES ABOVE, then these ratios have already been calculated for you: 1. Import the data you collected into IBM SPSS Software 2. Make necessary transformation of your data in SPSS. – Firm Size = Natural Log of Turnover (Sales) – Asset Growth = ((Total Assets2018 – Total Assets2017)/ Total Assets2017)*100 – Liquidity (Current Ratio) = Current Assets/Current Liabilities – Tangibility = Tangible Assets/Total Assets*100 – Debt Ratio = (Long-Term Debt/Total Assets)*100 3. Produce histograms and descriptive statistics (min/max, mean/median, standard deviation, skewness and kurtosis) for profitability and the other two variables you have. 4. Produce a Short Report in MS Word. Your report should contain the following: a) Introduction, where you specify the aim of the report and the variables you have selected. b) Explanation of the process of sample selection with reference to an appropriate sampling method. c) Explanation of the variables you have selected. d) Discussion of the main statistics for your variables from histograms and descriptive statistics (min/max, mean/median, standard deviation, skewness and kurtosis), including comments on the distribution of each variable. e) Conclusion of the report including the key findings of the descriptive statistics. NOTE: You are required to submit the data that you collected and transformed in SPSS (or EXCEL) on Canvas. Part 2 (60%): Statistical Analysis using SPSS (1,500 words). You are required to examine factors that can influence firm profitability using statistical analysis in IBM SPSS software. To do that, you need to use the dataset you created in Part 1 of the Portfolio. Use the dataset you have created in Part 1. Select the profitability measure and two variables that can be related to profitability from Part 1. Perform the following tasks in IBM SPSS: 1. Use your descriptive statistics in Part 1 to identify outlying observations. Make appropriate adjustments to your variables to ensure that there are no extreme outliers. 2. Conduct statistical analysis in SPSS to examine what factors can influence firm profitability. Depending on the variables you selected, test any two hypotheses below:  H1: Firm Size is Significantly Related to Profitability  H2: Asset Growth is Significantly Related to Profitability  H3: Liquidity is Significantly Related to Profitability  H4: Asset Tangibility is Significantly Related to Profitability  H5: Debt Ratio is Significantly Related to Profitability To test your hypotheses, you need to perform the following: a) Perform Correlation Analysis to check whether there is linear association between profitability and each of the other two variables. Check whether there is any potential problem of multicollinearity. b) Perform either Simple or Multiple Regression Analysis to identify factors that can influence firm profitability. 3. Produce a Report in MS Word (see below for details). Your report should contain the following: a) Introduction, where you clearly state the aim of this section and the method you selected to conduct the analysis. b) Explanation and justification of the adjustments that were made to your variables (e.g. outliers or natural logarithm). c) Discussion of the results from the correlation analysis (coefficients and their p-values). d) Discussion of the results from either simple or multiple regression analysis (coefficients and their p-values; results from the overall model such as R2 and Adjusted R2). You should clearly state whether your results show evidence in support of the hypothesized relationship. e) Discussion of the main limitations of your study. f) Conclusion on what factors can be related to firm profitability.