Conduct correlation analysis on ROE, P/E and P/B ratios.

Finance and Accounting
Paper, Order, or Assignment Requirements

One of the learning outcomes assigned to Intermediate Accounting II (ACCT222), is the ability to utilize information technology in making business decisions. To assess this outcome, you will be expected to participate in the following activities:
1. Data gathering
2. Data processing
3. Reporting information
Data gathering:
You will be assigned a company listed on the Qatar Stock Exchange which is ((Al Meera Consumer Goods Company)). You will need to go on to the following website in order to download in information about your company's quarterly financial statements and financial ratios for the period March 31, 2011 until December 31, 2015 (total of 20 reports):
http://www.qe.com.qa/pps/qe/qe%20english%20portal/Pages/Home/
* To find quarterly financial statements, go to the listed Securities tab in the Qatar Exchange website, and then click financial statements. From the reports, you will need to collect information about the companys net profit and total shareholders equity.
* To obtain financial ratios, go to Market Statistics and then Financial Indicators. Select the date, starting with March 31, 2011, then June 30, 2011 and so forth. The two ratios that you will need are P/E ratio (defined as stock price divided by the earnings per share) and P/B ratio (defined as stock price divided by the book value per share).

Data processing:
* Input and organize the data into an excel spreadsheet. You need to have separate columns for the date and each variable (i.e. net income, shareholders equity, P/E ratio and P/B ratio).
* Compute your companys return on equity (ROE) ratio using the formula functions.
* Make sure that your Microsoft Excel has data analysis in the Data tab. If it does not, then please follow the instructions shown in the video through the link below:

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* Conduct correlation analysis on ROE, P/E and P/B ratios. For more information on doing correlations via Excel, please follow the video in the link below:

* Conduct regression analysis where ROE is the dependent variable and P/E and P/B ratios are the independent variables. For more information on doing regression via Excel, please follow the video in the link below:

Reporting information:
Write a brief report (two pages maximum) about the results of the correlation and regression analyses. Please make sure that you hand in the project in PDF form.

If you need help analyzing regression results, then please refer to the link below (minute 2.00).

 

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