Information Technology Project - Essay Example

Information technology project May 27, Information technology project Data was collected on Zad Holding Company, a listed company on the Qatar Exchange, and excel used to conduct correlation and regression analysis on relationships between the company’s return on investment, P/E ratio, and P/B ratio. Correlation analysisThe following table shows the correlation analysis results.Table 1: Correlation analysis resultsCorrelation analysis     ROEP/EP/BROE1  P/E0.0764671 P/B0.3083590.3997381The results show a weak but positive correlation between return on equity and price-earnings ratio (0.076), and this suggests a weak positive relationship between the variables.

A strong positive relationship, however, is suggested between return on equity and price-book-ratio (0.074). A strong positive correlation also exists between price-earnings ratio and price-to-book ratio (0.39).Regression analysis Regression analysis identifies exact effects and significance of a variable on another (Black, 2011). Table 2 shows regression analysis summary output for the relationship between return on equity and both price-earnings ratio and price-to-book ratio. Table 2: Summary outputRegression StatisticsMultiple R0.

090123432R Square0.008122233Adjusted R Square-0.108569269Standard Error0.184313633Observations20The developed model is not suitable for explaining a relationship between the variables because of the negative R2 value. This means that additional independent variable is necessary into the model. The regression model is, further, not significant and cannot be used to explain the relationship. Figure 3: ANOVA tableANOVA dfSSMSFSignificance FRegression20.00472910.0023645640.0696040.93302724Residual170.57751580.033971515Total190.

5822449   The model is not significant (p=0.933> 0.05, F= 0.069). No significant relationship, therefore, exists between ROE and both P/E and P/B. The following is the table of coefficients for the relationship.Table 4: Table of coefficients CoefficientsStandard Errort StatP-valueIntercept0.1975840.2374130.8322380.416813P/E-0.006440.029059-0.221590.82727P/B0.2663050.2024441.3154480.205826Each of the independent variables is not significant (p= 0.827, p= 0.206, > 0.05). The results conclude that no significant relationship exist between ROE and both P/E and P/B.

ReferencesBlack, K. (2011). Business statistics: For contemporary decision making. Hoboken, NJ: John Wiley & Sons.