FINANCIAL ANALYSIS

Descriptive statistics are a set of summary measures that provide a concise overview of the central tendency, variability, and shape of a data set. These statistics are commonly used to describe and summarize large datasets in a way that facilitates understanding and comparison. Key Descriptive Statistics: 1. Mean:– The average of all values in the […]

The sum of squares is a commonly used formula in mathematics to find the sum of squares of a set of numbers. Formula: Sum of Squares = n(n+1)(2n+1) / 6 where: Explanation: Example: Find the sum of squares of the numbers 1, 2, 3, and 4. “`Sum of Squares = 1(1+1)(2(1)+1) / 6 + 2(2+1)(2(2)+1) […]

Multiple linear regression is a statistical model that predicts a continuous dependent variable based on multiple independent variables. It is a powerful technique used in various fields, including business, science, and engineering. Model Formulation: The multiple linear regression model can be mathematically expressed as: y = b0 + b1x1 + b2x2 + … + bnxn […]

A probability distribution is a function that assigns a probability to each possible outcome of a random variable. It is a fundamental concept in probability theory and statistics. A probability distribution is a function that satisfies the following conditions: Types of Probability Distributions: Key Components of a Probability Distribution: Importance of Probability Distributions: Examples: Conclusion: […]

R-squared (R²) is a measure of how much variability in the dependent variable is explained by the independent variables in a regression model. It is a coefficient of determination that ranges from 0 to 1, with values closer to 1 indicating a better fit of the model to the data. Formula: R² = 1 – […]

Overfitting occurs when a model becomes too closely tailored to the specific data it was trained on, and does not generalize well to new data. Causes of Overfitting: Signs of Overfitting: Examples of Overfitting: Preventing Overfitting: Conclusion: Overfitting is a common problem in machine learning model training. It occurs when a model becomes too closely […]

Definition: A tree diagram is a graphical representation that organizes data by showing relationships between different categories or sets. It is a hierarchical structure that branches out from a central point, representing the main category or the root node. Components: Types: Uses: Examples: Benefits: Drawbacks: FAQs

Stratified Random Sampling Stratified random sampling is a sampling technique that divides the population into smaller groups, called strata, based on shared characteristics. Then, a random sample is drawn from each stratum, ensuring that the sample proportions of each stratum are proportional to their prevalence in the population. Process: Stratification: Divide the population into distinct […]

Quintiles Quintiles are a measure of quantile that divides a set of data into five equal parts, called quintiles. Formula for Quintile: Quintile = (n/5)th percentile where: n is the number of the observation 5 is the number of quintiles Calculating Quintiles: Arrange the data in ascending order. Calculate the number of observations (n). Multiply […]

Financial Analysis Introduction Financial analysis is the process of systematically gathering, analyzing, and interpreting financial data to understand the financial health of a company, organization, or individual. This information is used to assess overall financial performance, make informed investment decisions, and predict future trends. Key Objectives: Understand the financial health of a company: Analyze financial […]