Class Project Report: Multiple Regression and Strategic Plan Forecast Analysis

Tasks:

This assignment is the class project report to the executives of your assigned company.  You written discussion is critical and should be well organized and grammatically correct.  The best reports are well written and use Minitab results to support the points being made.  This completed assignment is worth up to 30 points and serves as the class project Strategic Plan Forecast.  Late submissions will not be graded.

This assignment is essentially the multiple regression and strategic plan forecast analysis portion of your project and includes the work in assignments that you have done thus far. This means that I expect you to develop a good regression model forecast using more than one significant independent variables (Xs).  That is you must use at least two independent (X) variables to forecast your company revenue (Y) for 8 quarters beyond the end of the Y variable data series.  This means that:

You will need to develop the best multiple regression model for the company revenue.

Then you will predict company revenue for each of the 8 forecast quarters with the model using only the best forecasts for each X variable.  You should not run the X variables separately -- they should all be in the model at the same time (multiple regression).  Single X variable models (simple regression) will not do for this assignment.

Then you should comment on the accuracy of the regression model using RMSE and MAPE and the reliability of the model with model F, Adjusted R-square, t and p statistics, regression ACF LBQ values, DW statistic and the KB coefficient t-value.  Make sure to include and comment on each of these statistics.

You will need to forecast the next 8 quarters of your company revenue past the end of the company revenue data series. (ending 12/31/2017). That is, forecast from first quarter of 2018 through the 4th quarter of 2019.

You will then use the income statement ratios to revenue from the material for your company 10K reports found in Doc Sharing to estimate costs (expenses) by variable categories.  Simple calculate the ratios of each element to revenue and multiply the ratios by your forecast revenue values to get strategic plan financial performance estimates. Pay particular attention to lines 18 and 19 on the planning template to see if the are added or subtracted to the Net Income.  You may need to adjust the sign of line 20 to make it consistent with your findings.

You supply a recent company common stock share price to determine the forecast implications on earnings per share and share prices for the plan period using common shares outstanding and share prices to earning per share (P/E ratio).  We will discuss this in class.

Ideally, if you made a good choice of variables you should be able to include all three or more X variables in your regression equation.  Be sure to complete each part and write your responses supported by Minitab/excel work.  Remember, that you are writing this to company executives and you must be clear in what you are showing and why.  This assignment must be submitted as a Word document.  You should include excel and Minitab tables and graphs you discuss in the body of Word document as close to the discussion as possible.  Be sure to comment on each of the 11 points below. 
1. F statistic  

2. R-square adjusted,

3. X variable coefficient significance,

4. VIF factors for multicolllinearity  

5. DW statistic for serial correlation,

6. KB test for heteroscedasticity

7. RMSE and MAPE for model accuracy,

8. Times series plot for a reasonableness check,

9. ACF abd TSP of the residuals and what the model left out.

10. Business implications of the forecast.

11. Suggestions for financial performance improvement.