Stat Report

University of Dhaka
Department of Finance
A Term Paper
On
Statistical Analysis of the Financial Statements
Course: F 207
Applied Statistics
Submitted To
Md. Taher Jamil
Lecturer
Department of Finance
University of Dhaka
Submitted By
Group 07
Seria
l
ID No. Name Remarks
No.
1. 21-042 Sadia Ishrat Tasnia
2. 21-057 Farzana Jahan Labonnya
3. 21-069 Md Safiul Alam Mukul
4. 21-072 Maha Islam
5. 21-129 Amar Krishna Podder
Date of Submission:
20th February, 2017
Letter of Transmittal
20th February, 2017
Md. Taher Jamil
Lecturer
Department of Finance,
University of Dhaka
Subject: Letter of Transmittal for the Term-Paper.
Sir,
We are pleased to present the term paper that you asked for as a part of our BBA, 2 nd
year 2nd semester course, F-207: Applied Statistics. We are thankful to you for giving
us such an amazing opportunity to work on the topic Statistical Analysis on the
Financial Statements of the Companies of Bangladesh.
We are privileged to work on such a sector where we could apply our theoretical
knowledge of statistical tools. We have also learned about the practical usage of these
statistical tools on the real-life cases and applied them on the financial statements of
three companies.
The study we conducted enhanced our knowledge to make an executive report. This
report has given us an exceptional experience that might have immense uses in the
future endeavors. We sincerely hope that it would be able to fulfill your expectations.
We have put our sincere effort to give this report a presentable shape and make it as
precise as possible. We cordially thank you for providing us with this unique
opportunity.
Sincerely yours,
Md Safiul Alam Mukul;

On Behalf of Group 07
Table of Contents
Chapter Content Page No.

Executive Summary
1 Introduction
2 Anova
3 Sign Test
4 Wilcoxon Signed- Rank Test
5 Kruskal-Wallis Test
6 Regression Analysis
Conclusion
Executive Summary
This term-paper is prepared to fulfill the requirement of our Course F-207, Applied
5
Statistics. We have studied about how to make statistical inferences and how we can select
a random sample to estimate the value of populations. We have got our primary and
theoretical knowledge from studying this course. But we are able to apply that knowledge
on the information of the financial statements of three companies: ACI Ltd, Beximco
Pharmaceuticals and Square Pharmaceuticals. Throughout the term paper we have tried to
show some application of statistical tools including non-parametric tests. In the parametric
tests, we have showed the ANOVA and in the non-parametric tests, we have showed the
Wilcoxon sign rank test and the Kruskal Wallis analysis of variances by ranks. We also
show regression analysis. But in case of non-parametric test, we can refer it as distribution
free tests where the data can be ranked or ordered. Throughout the term paper we have
tried to show the applications of these tools by using as many parameters as we could.
6
Chapter One:
Introduction
Objectives of the Study
The general objective of preparing this report is to fulfill the requirement of Course F-
7
207, Applied Statistics, as well as the completion of the BBA Program through gaining the
practical and theoretical knowledge of the sector. The objective to prepare the report is
classified into two parts. They are:
1. Primary Objective:
The broad project objective is to experience the practical usage of the statistical
analysis tools.
2. Specific objectives:
a. To gather knowledge about theoretical and analytical aspects of Applied Statistics

b. To apply the analytical skill on the practical usage of statistical concepts and tools
c. To identify the present situation of this sector through different statistical analysis
d. Enrich our knowledge by working practically on the financial statements of the three
companies
Methodology of the Study
The methodology of this report is collective and the report was prepared through a lengthy
process. The process of preparing the report is given bellow:
1. At first, we, the members of group-07, held a discussion about how we will work together
on the topic. Then we prepared a list of companies and with mutual consent assigned them
to our group members.
2. After that we searched for the latest financial statements of these three companies
throughout the internet and succeeded to collect them. We selected the data and
information which are actually related to our assigned topic and prepared the report by
analyzing them.
8
3. We used the knowledge from our Business English and Communication course for the
evaluation and the preparation of the report and summarized the data collected from
Journals, Articles, Websites and Books.
4. The Document is prepared with the help of MS word and MS Excel. The Graphs are also
made with the help of MS excel.
5. At last, we checked for the errors for several times and tried to give the report a
presentable shape
Limitations of the Study
Analytical work is very much comprehensive. It is an accumulation of both information

and creative thinking. It requires great efforts and long sound planning to make it happen.
We faced some usual restrictions during the preparation of our report.
While preparing this report, we have faced these problems:
1. Lack of Experience: As we are really new in the practical applications of statistical tools,
we felt lack of experience in every stage of our work.
2. Difficulty to collect data: As all data are collected from Financial Statements, it is hard
for us to find out the real information we want to work on. Sometimes we found difficulty
in deciding the parameters to work on. In many cases, access to the information was
strictly prohibited.
3. Lack of Time: As we are new in this type of analytical task, we face the time constraint.
Though this report has some limitations, we, the group members, tried our best to prepare
a standard report. We have faced several challenges to prepare this report, but we have
succeeded to overcome it.
9
Chapter Two:
Theoretical Overview
10
What is Hypothesis?
Hypothesis is a statement about a population parameter subject to verification. Data are
used to check the reasonableness of the statement.
What is Hypothesis Testing?

The term Hypothesis testing and testing a hypothesis are used interchangeably.
Hypothesis Testing is a procedure based on sample evidence and probability theory to
determine whether the hypothesis is a reasonable statement.
Five Step Procedure for testing a Hypothesis:

There is a five-step procedure that systemizes hypothesis testing. When we get to step 5,
we are ready to reject or not reject the hypothesis.
State Null Select a Identify Formulate Take a

and level of the Test sample,
Significant a Decision arrive at
Alternate
Hypothesis ce Statistic Rule decision
Do not Reject
H0 and
reject
accept
H0
Step 1: State the Null Hypothesis (H0) and the alternate Hypothesis (H1)
Null hypothesis is a statement about the value of a population parameter developed for
the purpose of testing numerical evidence which is designated as H 0. The capital letter
H stands for hypothesis and the subscript zero implies no difference.
11
Alternate hypothesis is a statement that is accepted if the sample data provide
sufficient evidence that the null hypothesis is false. It is written H 1 and is read H sub
one. The alternate hypothesis is accepted if the sample data provide us with enough
statistical evidence that the null hypothesis is false.
Step 2: Select a level of Significance:
The next step is to state the level of Significance. Level of significance is the
probability of rejecting the null hypothesis when it is true.
The level of significance is designated , the Greek letter alpha. It is also called the level
of risk.
Step 3: Select the Test Statistic:
There are many test statistics. We use Z test, t-test, F test and chi-square test. Test
Statistic is a value determined from sample information which is used to determine
whether to reject the null hypothesis.
Step 4: Formulate the Decision Rule:]
A decision rule is a statement of the specific conditions under which the null
hypothesis is rejected and the conditions under which it is not rejected. The region or
area of rejection defines the location of all those values that are so large or so small
that the probability of their occurrence under a true null hypothesis is rather remote.
Critical value is the dividing point between the region where the null hypothesis is
rejected and the region where it is not rejected.
Step 5: Making a Decision:
The fifth and final step in hypothesis testing is computing the test statistic, comparing it
to the critical value and making a decision to reject or not to reject the null hypothesis.
Only one of the two decisions is possible in hypothesis testing- either accept or reject
the null hypothesis.
12
One-Tailed and Two-Tailed Test of Significance:
Hypothesis testing is one-tailed if H1 states > or <. In summary, a test is one-tailed
when the alternate hypothesis, H1 states a direction such as;
H0: The mean income of 100 employees is less than or equal to

$55000 per year. H1: The mean income of 100 employees is greater
than $55000 per year.
If no direction is specified in the alternate hypothesis, we use a two-tailed

test.
H0: The mean income of 100 employees is $55000 per year.
H1: The mean income of 100 employees is not equal to $55000 per year.
13
p-Value in Hypothesis Testing:
In testing a hypothesis, we compare the test statistic to a critical value. A decision is
made either to reject the null hypothesis or not to reject it. In recent years, spurred by
the availability of computer software, additional information is often reported on the
strength of the rejection or acceptance. The approach reports the probability
(assuming the null hypothesis is true) of getting a value of the test statistic at least as
extreme as the value actually obtained. This is known as pvalue.
p-Value is the probability of observing a sample value as extreme as, or more extreme
than, the value observed, given that the null hypothesis is true.
If the p-Value is smaller than the significance level, H 0 is rejected. If it is larger than the
significance level, H0
14
Analysis of variance (ANOVA)
Analysis of variance (ANOVA) is used to determine whether there are any statistically significant
differences between the means of three or more independent (unrelated) groups. It tests the hypothesis that
the means of two or more populations are equal.
When we want to test the equality of more than two population means, the Analysis of Variance (ANOVA)
technique is used and the F distribution is used as the test statistic. The analysis of variance can be used as
an exploratory tool to explain observations.
The ANOVA to test equality of more than two population means requires that three assumptions are true:
The populations follow normal distribution.
The populations have equal standard deviations ().
The populations are independent.
It is simple to use and best suited for small samples. With many experimental designs, the sample
sizes have to be the same for the various factor level combinations. Balanced experiments
(those with an equal sample size for each treatment) are relatively easy to interpret;
unbalanced experiments offer more complexity. For single factor (one way) ANOVA, the
adjustment for unbalanced data is easy, but the unbalanced analysis lacks both robustness
and power. For more complex designs the lack of balance leads to further complications
ANOVAs assess the importance of one or more factors by comparing the response
variable means at the different factor levels. The null hypothesis states that all population
means (factor level means) are equal while the alternative hypothesis states that at least
one is different.
Practical Study of ANOVA in Financial Statements
ACI Limited, BEXIMCO Limited and Square Pharmaceuticals Limited all of these
companies are the renowned companies of our country SQUARE strives, above all, for
top quality health care products at the least cost reaching the lowest rungs of the economic
class of people in the country. ACI Pharma has taken many initiatives to improve the
quality of healthcare delivery.
15
The annual reports of these companies reveal their financial position. All of the companies
are selling very well and developing their businesses day by day. So, we have collected
the annual reports of 3 years and selected 20 parameters as sample.
Now we are going to compare these 20 parameters of these three companies with the help
of ANOVA tools to examine if the means of these 20 parameters are same for ACI
Limited, BEXIMCO Limited and Square Pharmaceuticals Limited
Property, Plant and Equipment
We are going to analysis if there are any difference in the mean values of Property, Plant
and Equipment among the 3 Pharmaceuticals Companies.
Year ACI Limited BEXIMCO Square

Limited Pharmaceuticals
(in Million) Limited
(in Million)
(in Million)
2013 3,799 28,297 9,908
2014 6,540 27,458 18,009
2015 6,596 28,116 13,933
Stating the null hypothesis and the alternative hypothesis
The null hypothesis is that the mean values of PPE are the same for the three companies.
0: A = B = S
The alternate hypothesis is that the mean values of PPE of these three companies are not
quite same.
If the null hypothesis is not rejected, we conclude that there is no difference in the mean
values of PPE for these three companies.
Selecting the Level of Significance
16
We have selected the .05 significance level.
Determining the Test Statistics
The test statistic follows F- distribution
Performing the Calculations and Making Decision
It is convenient to summarize the calculations of the F- statistic in an ANOVA table. The

format for an ANOVA table is as follows.
Anova: Single Factor
SUMMARY
Groups Coun Sum Average Variance
t
ACI Limited 3 16935 5645 2556571
BEXIMCO Limited 3 83871 27957 194941
Square 3 41850 13950 16406767
Pharmaceuticals
Limited
ANOVA
Source of SS df MS F P-value F crit
Variation
Between 7.63E+0 2 381497209 59.7387493 0.00010933 10.9247
Groups 8 4 4 7
Within 3831655 6 6386093
Groups 8
17
Total 8.01E+0 8
8
Interpretation:
In the above excel, the term Between Groups is used for treatments and Within Groups
for error. We use excel here for the calculations.
Here, the computed value of F is 59.73874934, so our decision is to reject the null
hypothesis as the computed value is greater than the critical value of 10.92477. So at 5%
level of significance, we can conclude that there is difference in the mean asset value
among the three companies. We get the mean asset value of each company from the
Average column of Summary heading.
Lastly, we get the p-value of 0.000109334 which is less than the significance level. So we
can say that there is only 0.000109334% possibility of rejecting null when it is actually
true.
So we can conclude that the mean values of Property, Plant and Equipment are different
for at least one of the companies.
Investment
Like Property, Plant and Equipment, now we are going to analysis if there are any
difference in the mean values of Investment among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
18
2013 1,799 4,861 157
2014 1,858 5,746 147
2015 1,902 14,013 251
0: The mean values of Investment are the same for the three companies.
1: The mean values of investment of these three companies are not quite same.
At 5% level of significance, the Anova table is calculated in the Excel.
SUMMARY
Groups Coun Sum Average Variance
t
ACI Limited 3 5559 1853 2671
BEXIMCO Limited 3 24620 8206.666667 25480936.3
3
Square Pharmaceuticals 3 555 185 3292
Limited
ANOVA
Variation
Between 107498440. 2 53749220.1 6.32668800 0.03327985 5.1432528
Groups 2 1 6 4 5
Within 50973798.6 6 8495633.11
Groups 7 1
Total 158472238. 8
9
Interpretation:
19
Here, the computed value of F is 6.326688006, so our decision is to reject null hypothesis
as the computed value is greater than the critical value of 5.14325285. So at 5% level of
significance, we can conclude that there are difference in the mean value of investment
among the three companies.
Lastly, we get the p-value of 0.033279854 which is less than the significance level. So we
can say that there is only 0.033279854% possibility of rejecting null when it is actually
true.
So we can conclude that the mean values of total Investment are different for at least one
of the companies.
Inventories
Again, we are going to analysis if there are any difference in the mean values of
Inventories among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 2,961 3,091 3,091
2014 3,949 2,406 2,737
2015 3,954 2,208 3,310
0: The mean values of Inventories are the same for the three companies.
1: The mean values of Inventories of these three companies are not quite same.
20
SUMMARY
Groups Count Sum Average Variance
ACI Limited 3 10864 3621.333333 327036.333
3
BEXIMCO Limited 3 7705 2568.333333 214686.333
3
Limited
ANOVA
Variation
Between Groups 1667982.8 2 833991.44 4.0010869 0.0786805 5.1432528
89 44 04 45 5
Within Groups 1250647.3 6 208441.22
33 22
Total 2918630.2 8
22
Interpretation:
Here, the computed value of F is 4.001086904, so our decision is to accept null hypothesis
as the computed value is less than the critical value of 5.14325285. So at 5% level of
significance, we can conclude that there are no difference in the mean values of
Inventories among the three companies.
Lastly, we get the p-value of 0.078680545which is greater than the significance level. So
we can say that there is only 0.078680545% possibility of accepting null when it is
actually false.
21
So we can conclude that the mean values of total Inventories are same for the three
companies.
Trade Receivables
Now, we are going to analysis if there are any difference in the mean values of Trade
Receivables among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 1,350 24,648 812
2014 1,950 26,259 766
2015 2,249 27,303 894
0: The mean values of Trade Receivables are the same for the three companies.
1: The mean values of Trade Receivables of these three companies are not quite same.
SUMMARY
ACI Limited 3 5549 1849.666667 209600.333
3
BEXIMCO Limited 3 78210 26070 1789047
Square 3 2472 824 4204
Pharmaceuticals
22
Limited
ANOVA
Variation
Between Groups 122503705 2 612518527 917.46978 0.00000003462 5.143252
5 .4 51 06 85
Within Groups 4005702.6 6 667617.11
67 11
Total 122904275 8
8
Interpretation:
significance, we can conclude that there are difference in the mean values of Trade
Receivables among the three companies. Lastly, we get the p-value of 0.0000000346206
which is less than the significance level. So we can say that there is only
0.0000000346206% possibility of rejecting null when it is actually true.
So we can conclude that the mean values of total Trade Receivables are different for at
least one of the companies.
Cash and Cash Equivalents
Again, we are going to analysis if there are any difference in the mean values of Cash and
Cash Equivalents among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
23
2013 462 80 981
2014 525 58 2,162
2015 619 297 3,892
0: The mean values of Cash and Cash Equivalents are the same for the three companies.
1: The mean values of Cash and Cash Equivalents of these three companies are not quite
same.
SUMMARY
ACI Limited 3 1606 535.3333333 6242.33333
3
BEXIMCO Limited 3 435 145 17449
Square 3 7035 2345 2143597
Pharmaceuticals
Limited
ANOVA
Variation
Between Groups 8267253.5 2 4133626.7 5.7218415 0.0406948 5.143252
56 78 02 26 85
Within Groups 4334576.6 6 722429.44
67 44
Total 12601830. 8
22
Interpretation:
24
significance, we can conclude that there are difference in the mean values of Cash and
Cash Equivalents among the three companies. Lastly, we get the p-value of 0.040694826
which is less than the significance level. So we can say that there is only 0.040694826%
possibility of rejecting null when it is actually true.
So we can conclude that the mean values of total Cash and Cash Equivalents are different
for at least one of the companies.
Share Capital
We will analysis if there are any difference in the mean values of Share Capital among the
3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 343 5,226 3,707
2014 398 6,010 4,819
2015 398 6,911 5,542
0: The mean values of Share Capital are the same for the three companies.
1: The mean values of Share Capital of these three companies are not quite same.
Anova: Single
Factor
SUMMARY
25
ACI Limited 3 1139 379.6666667 1008.333333
BEXIMCO 3 18147 6049 710947
Limited
Square 3 14068 4689.333333 854416.3333
Pharmaceuticals
Limited
ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 5256326 2 26281630.33 50.3360043 0.0001779 5.14325
1 3 5 3
Within Groups 3132743 6 522123.8889
Total 5569600 8
4
Interpretation:
significance, we can conclude that there are difference in the mean values of Share Capital
among the three companies. Lastly, we get the p-value of 0.00017795 which is less than
the significance level. So we can say that there is only 0.00017795% possibility of
rejecting null when it is actually true.
So we can conclude that the mean values of total Share Capital are different for at least
one of the companies.
Share Premium
Now, we are going to analysis if there are any difference in the mean values of Share
Premium among the 3 Pharmaceuticals Companies.
26
(in Million)
Limited
(in Million)
(in Million)
2013 351 251 2,035
2014 402 289 2,035
2015 402 376 2,035
0: The mean values of Share Premium are the same for the three companies.
1: The mean values of Share Premium of these three companies are not quite same.
SUMMARY
ACI Limited 3 1155 385 867
BEXIMCO Limited 3 916 305.333333 4106.3333
3 3
Square 3 609 203 0
Pharmaceuticals
Limited
ANOVA
Variation
Between Groups 49942.888 2 24971.444 15.06320 0.0045812 5.14325
89 44 38 02 3
27
Within Groups 9946.6666 6 1657.7777
67 78
Total 59889.555 8
56
Interpretation:
significance, we can conclude that there are difference in the mean values of Share
Premium among the three companies. Lastly, we get the p-value of 0.004581202 which is
less than the significance level. So we can say that there is only 0.004581202% possibility
of rejecting null when it is actually true.
So we can conclude that the mean values of total Share Premium are different for at least
Reserve
Now, we are going to analysis if there are any difference in the mean values of Reserve
among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 1,049 27,180 105
2014 3,267 27,715 105
2015 3,280 35,088 105
28
0: The mean values of Reserve are the same for the three companies.
1: The mean values of Reserve of these three companies are not quite same.
Anova: Single
Factor
SUMMARY
ACI Limited 3 7596 2532 1649509
BEXIMCO Limited 3 89983 29994.3333 19530636.
3 3
Square 3 315 105 0
Pharmaceuticals
Limited
ANOVA
Variation
Between Groups 165344232 2 826721164 117.09851 0.000015 5.143252
8 .1 2 5 85
Within Groups 42360290. 6 7060048.4
67 44
Total 169580261 8
9
Interpretation:
significance, we can conclude that there are difference in the mean values of Reserve
among the three companies. Lastly, we get the p-value of 0.0000155 which is less than the
significance level. So we can say that there is only 0.0000155% possibility of rejecting
null when it is actually true.
29
So we can conclude that the mean values of total Reserve are different for at least one of
the companies.
Retained Earnings
We are going to analysis if there are any difference in the mean values of Retained
Earnings among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 4,861 16,861 16,017
2014 7,646 15,738 18,922
2015 7,868 15,951 23,143
0: The mean values of Retained Earnings are the same for the three companies.
1: The mean values of Retained Earnings of these three companies are not quite same.
SUMMARY
ACI Limited 3 20375 6791.66666 2807926.3
7 3
BEXIMCO Limited 3 48550 16183.3333 355766.33
3 3
30
Square 3 58082 19360.6666 12839290.
Pharmaceuticals 7 3
Limited
ANOVA
Variation
Between Groups 256278610 2 128139305 24.02164 0.0013684 5.143252
.9 .4 12 49 85
Within Groups 32005966 6 5334327.6
67
Total 288284576 8
.9
Interpretation:
significance, we can conclude that there are difference in the mean values of Retained
Earnings among the three companies. Lastly, we get the p-value of 0.001368449which is
So we can conclude that the mean values of total Retained Earnings are different for at
Non-current Liabilities
Further, we are going to analysis if there are any difference in the mean values of Non-
current Liabilities among the 3 Pharmaceuticals Companies.

31
(in Million) (in Million) Limited
(in Million)
2013 560 13,406 1,682
2014 1,095 10,321 1,902
2015 1,112 32,261 1,550
0: The mean values of Non-current Liabilities are the same for the three companies.
1: The mean values of Non-current Liabilities of these three companies are not quite
same.
SUMMARY
ACI Limited 3 2767 922.333333 98536.333
3 3
BEXIMCO Limited 3 55988 18662.6666 141065308
7
Square 3 5134 1711.33333 31621.333
Pharmaceuticals 3 3
Limited
ANOVA
Variation
Between 602689649 2 301344824 6.402716 0.0324790 5.143252
Groups .6 .8 04 86 85
Within Groups 282390932 6 47065155.
33
Total 885080581 8
.6
32
Interpretation:
significance, we can conclude that there are difference in the mean values of Non-current
Liabilities among the three companies. Lastly, we get the p-value of 0.032479086 which is
So we can conclude that the mean values of total Non-current Liabilities are different for
at least one of the companies.
Current Liabilities
Again, we will analysis if there are any difference in the mean values of Current
Liabilities among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 8,358 28,518 3,275
2014 6,547 35,694 2,394
2015 8,044, 20,836 2,549
0: The mean values of Current Liabilities are the same for the three companies.
1: The mean values of Current Liabilities of these three companies are not quite same.
33
SUMMARY
ACI Limited 3 22949 7649.66666 936554.33
7 3
BEXIMCO Limited 3 85048 28349.3333 55211377.
3 3
Square Pharmaceuticals 3 8218 2739.33333 221210.33
Limited 3 3
ANOVA
Variation
Between 110845967 2 554229836. 29.496448 0.00078678 5.14325285
Groups 4 8 8 5
Within Groups 112738284 6 18789714
Total 122119795 8
8
Interpretation:
significance, we can conclude that there are difference in the mean values of Current
Liabilities among the three companies. Lastly, we get the p-value of 0.000786785 which is
So we can conclude that the mean values of total Current Liabilities are different for at
Cost of Goods Sold
34
Again, we will analysis if there are any difference in the mean values of Cost of Goods
Sold among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 7,147 14,090 12,960
2014 8,304 15,154 12,960
2015 4,380 13,785 14,942
0: The mean values of Cost of Goods Sold are the same for the three companies.
1: The mean values of Cost of Goods Sold of these three companies are not quite same.
SUMMARY
ACI Limited 3 19831 6610.33333 4065452.3
3 3
BEXIMCO Limited 3 43029 14343 516547
Square 3 40862 13620.6666 1309441.3
Pharmaceuticals 7 3
Limited
ANOVA
Variation
35
Between 109460672 2 54730336. 27.86941 0.0009178 5.143252
Groups .7 33 57 64 85
Within Groups 11782881. 6 1963813.5
33 56
Total 121243554 8
Interpretation:
significance, we can conclude that there are difference in the mean values of Cost of
Goods Sold among the three companies. Lastly, we get the p-value of 0.000917864 which
is less than the significance level. So we can say that there is only 0.000917864%
possibility of rejecting null when it is actually true.
So we can conclude that the mean values of total Cost of Goods Sold are different for at
least one of the companies
Gross Profit
We will analysis if there are any difference in the mean values of Gross Profit among the 3
Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 5,170 7,602 10,307
2014 6,262 7,006 10,307
2015 3,560 7,600 11,741
0: The mean values of Gross Profit are the same for the three companies.
36
1: The mean values of Gross Profit of these three companies are not quite same.
Anova: Single
Factor
SUMMARY
ACI Limited 3 14992 4997.33333 1847561.3
3 3
BEXIMCO Limited 3 22208 7402.66666 118009.33
7 3
Square 3 32355 10785 685452
Pharmaceuticals
Limited
ANOVA
Variation
Between Groups 50722892. 2 25361446. 28.69999 0.0008475 5.143252
67 33 56 91 85
Within Groups 5302045.3 6 883674.22
33 22
Total 56024938 8
Interpretation:
significance, we can conclude that there are difference in the mean values of Gross Profit
among the three companies. Lastly, we get the p-value of 0.000847591 which is less than
the significance level. So we can say that there is only 0.000847591% possibility of
rejecting null when it is actually true.
37
So we can conclude that the mean values of total Gross Profit are different for at least one
of the companies.
Operating Expenses
Again, we will analysis if there are any difference in the mean values of Operating
Expenses among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 3,468 7,053 4,340
2014 4,738 6,316 4,340
2015 2,932 6,707 4,692
0: The mean values of Operating Expenses are the same for the three companies.
1: The mean values of Operating Expenses of these three companies are not quite same.
SUMMARY
ACI Limited 3 11138 3712.66666 860305.33
7 3
Limited 3 3
38
ANOVA
Variation
Between 14424690. 2 7212345.3 20.85361 0.0019893 5.143252
Groups 67 33 44 04 85
Within Groups 2075135.3 6 345855.88
33 89
Total 16499826 8
Interpretation:
significance, we can conclude that there are difference in the mean values of Operating
Expenses among the three companies. Lastly, we get the p-value of 0.001989304 which is
So we can conclude that the mean values of total Operating Expenses are different for at
Finance Cost
Again, we will analysis if there are any difference in the mean values of Finance Cost

(in Million)
Limited
(in Million)
(in Million)
2013 296 6,106 177
39
2014 92 5,432 177
2015 22 5,922 158
0: The mean values of Finance Cost are the same for the three companies.
1: The mean values of Finance Cost of these three companies are not quite same.
Anova: Single
Factor
SUMMARY
ACI Limited 3 410 136.6666667 20265.3333
3
Square 3 512 170.6666667 120.333333
Pharmaceuticals 3
Limited
ANOVA
Variation
Between 64216400.8 2 32108200.44 679.501882 8.49E-08 5.1432528
Groups 9 3 5
Within 283515.333 6 47252.55556
Groups 3
Total 64499916.2 8
2
Interpretation:
40
significance, we can conclude that there are difference in the mean values of Finance Cost
among the three companies. Lastly, we get the p-value of 8.49E-08 which is less than the
significance level. So we can say that there is only 8.49E-08% possibility of rejecting null
when it is actually true.
So we can conclude that the mean values of total Finance Cost are different for at least
Income Tax
Further, are going to analysis if there are any difference in the mean values of Income Tax

(in Million)
Limited
(in Million)
(in Million)
2013 280 15 1,050
2014 401 2,888 1,439
2015 222 5,855 1,532
0: The mean values of Income Tax are the same for the three companies.
1: The mean values of Income Tax of these three companies are not quite same.
SUMMARY
41
ACI Limited 3 903 301 8341
BEXIMCO Limited 3 8758 2919.333333 8527136.33
3
Square 3 4021 1340.333333 65382.3333
Pharmaceuticals 3
Limited
ANOVA
10429124. 5214562.1 1.818851 0.2412865 5.143252
Between Groups 22 2 11 48 65 85
17201719. 2866953.2
Within Groups 33 6 22
27630843.
Total 56 8
Interpretation:
significance, we can conclude that there is no difference in the mean values of Income Tax
among the three companies. Lastly, we get the p-value of 0.241286565 which is greater
than the significance level. So we can say that there is only 0.241286565 % possibility of
accepting null when it is actually false.
So we can conclude that the mean values of total Income Tax are same for the three
companies
Net cash provided by operating activities
We are going to analysis if there are any difference in the mean values of Net cash
provided by operating activities among the 3 Pharmaceuticals Companies.
42
(in Million)
Limited
(in Million)
(in Million)
2013 1,065, 1,065 5,299
2014 68 159 6,416
2015 159 6,473
0: The mean values of Net cash provided by operating activities are the same for the
three companies.
1: The mean values of Net cash provided by operating activities of these three
companies are not quite same.
SUMMARY
ACI Limited 3 1292 430.6666667 303854.333
3
Square 3 18188 6062.666667 438202.333
Pharmaceuticals 3
Limited
ANOVA
Between Groups 57991338. 2 28995669. 76.524649 0.0001780 5.7861350
43
67 33 72 1 43
Within Groups 1894531.3 5 378906.26
33 67
Total 59885870 7
Interpretation:
significance, we can conclude that there are difference in the mean values of Net cash
provided by operating activities among the three companies. Lastly, we get the p-value of
0.00017801 which is less than the significance level. So we can say that there is only
So we can conclude that the mean values of total Net cash provided by operating activities
are different for at least one of the companies.
Net cash used in investing activities
Now, we are going to analysis if there are any difference in the mean values of Net cash
used in investing activities among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 373 238 4,129
2014 1,759 37 3,135
2015 466 352 2,437
44
0: The mean values of Net cash used in investing activities are the same for the three
companies.
1: The mean values of Net cash used in investing activities of these three companies are
not quite same.
SUMMARY
ACI Limited 3 2598 866 600249
Limited 3
ANOVA
Source of
Variation SS df MS F P-value F crit
15186102.8 7593051.44 16.8896700 0.00343147 5.1432528
Between Groups 9 2 4 8 6 5
2697406.66 449567.777
Within Groups 7 6 8
1788350
Total 9.56 8
Interpretation:
significance, we can conclude that there are difference in the mean values of Net cash
used in investing activities among the three companies. Lastly, we get the p-value of
0.003431476 which is less than the significance level. So we can say that there is only
So we can conclude that the mean values of total Net cash used in investing activities are
different for at least one of the companies.
45
Net cash used in financing activities
We are going to analysis if there are any difference in the mean values of Net cash
provided by operating activities among the 3 Pharmaceuticals Companies.

(in Million)
Limited
(in Million)
(in Million)
2013 300 44 936
2014 1,959 2,905 2,099
2015 88 6,447 2,305
0: The mean values of Net cash used in financing activities are the same for the three
companies.
1: The mean values of Net cash used in financing activities of these three companies are
not quite same.
SUMMARY
ACI Limited 3 2347 782.3333333 1049644.33
3
BEXIMCO Limited 3 9396 3132 10288249
Limited
ANOVA
Source of SS df MS F P-value F critical
46
Variation
Between Groups 8344176.22 2 4172088.11 1.05331339 0.40544617 5.1432528
2 1 7 9 5
Within Groups 23765508.6 6 3960918.11
7 1
Total 32109684.8 8
9
Interpretation:
significance, we can conclude that there is no difference in the mean values of Net cash
used in financing activities among the three companies. Lastly, we get the p-value of
0.405446179 which is greater than the significance level. So we can say that there is only
0.405446179 % possibility of accepting null when it is actually false.
So we can conclude that the mean values of total Net cash used in financing activities are
same for the three companies.
The Sign Test

Its a non-parametric test. A nonparametric test is a hypothesis test that does not require the
population's distribution to be characterized by certain parameters. ... For instance,
nonparametric tests require the data to be an independent random sample. The sign test is
based on the sign of a difference between two related observations. We always designate a plus
sign for positive difference and minus sign for negative difference. The sign test has many
applications. One is before / after experiment. One or Two tailed test can be done with the sign
test.
Case:
47
On the last annual meeting of ACI pharmaceutical company the director wants to see whether
their amount of different assets are increasing / decreasing or in constant. Because they want to
increase their assets or improve the financial value of their assets. For that they analyses the last 3
years data (Before & After value) of different assets. They want to know how much perimeters of
assets are increasing or not at 90% confidence interval. It was announced that the training session
would commence the on December 31, 2016.
Solution:
A sample of 6 assets was selected from 20 perimeters that we used. In specific day we took the
information from their balance sheet and prepare the following table.
Before and after increasing / decreasing / constant condition of assets.
Name of Assets Before After Sign of Difference

Cash & Cash Increase Increase 0
equivalent
Property, Plant & Constant Increase +
Equipment
Investments Decrease Increase +
Inventories Decrease Increase +
Trade & Other Increase Decrease -
receivable
Short term loan Decrease Increase +
Step 1: State the Null hypothesis & Alternate hypothesis
H: .50
H1: .50
Step 2: Level of significance is .10.
Step 3: Test statistic: It is the number of plus signs resulting from the experiment.
Step 4: This is an one tailed test because the alternate hypothesis gives a direction. Recall that
we selected .10 level of significance. To arrive at the decision rule for this problem, we go to the
cumulative probabilities in following table. Here n=5, =.50
Number of success Probability of success Cumulative probability
48
0 0.031 1.000
1 0.156 0.969
2 0.313 0.813
3 0.313 0.5
4 0.156 0.187
5 0.031 0.031
We read up from the bottom until we come to the cumulative probability nearest to but not
exceeding the level of significance .10. The cumulative probability is .090. The number of
success (Plus Sign) corresponding to .031 is in 5 column 1. Therefore the decision rule is: if the
number of plus signs in the sample is 5 then the null hypothesis is rejected. Otherwise we cant
reject the null hypothesis.
Step 5: Make a decision regarding null hypothesis: Even out of 5 perimeter in asset section is that
if there is 4 or more plus signs then we accept null hypothesis.
Wilcoxon Rank-Sum Test

The Wilcoxon signed-rank test is a non-parametric statistical hypothesis test used when
comparing two related samples, matched samples, or repeated measurements on a single
sample to assess whether their population mean ranks differ. It can be used as an
alternative to the paired Student's t-test, t-test for matched pairs, or the t-test for dependent
samples when the population cannot be assumed to be normally distributed.
Assumption:
1. Data are paired and come from the same population.
2. Each pair is chosen randomly and independently
3. The data are measured at least on an ordinal scale.
Wilcoxon Rank-Sum Test for Dependent Variable
49
IDLC is a financial company. It's going to invest in pharmaceuticals companies.
There is two alternative companies. IDLC manager is going to take decision based
on asset sizes. The manager is planning to invest in Pharmaceuticals industry to
earn more profit because this market growing to invest the fund, the manager wants
to ensure that the investment will earn more profit. The manager selects two
companies such as Square pharmaceuticals limited and Beximco Limited. For
testing the manager selects a random sample of seven types of assets for year 2015.
Different types of Assets of Beximco and Square pharmaceuticals Limited 2015
Beximco Square
Cash and cash equivalents 2,100 900
Property, plant and equipment 13,900 8,000
Investments property 6300 900
Inventories 2,700 6,000
Trade and other receivables 760 4,000
Investment on Shares 931 835
Advance and deposits 4,300 3600
Solution of Nonparametric Methods:

Wilcoxon Signed -Rank Test for 2015
Step-1: State the null hypothesis and the alternate hypothesis.

Ho: There is no difference in total asset composition of the two pharmaceuticals industries
for investment.
H1: Beximco Limited is better for investment.
50
Step-2: We selected the. 05 significance level.
Step3: The statistics follows the Wilcoxon T values.
Step4: Formulate the decision rule to determine the decision, we need the critical value
0 3 Critical value
Here n=7. So the Wilcoxon T values give us the critical value which is 3 at 5%
significance level.
H0 is rejected if the smaller of the rank sum is 8 or less.
Beximco Square difference positive |differ| ran signed

k rank
Cash and cash 2,100 900 1,200 1 1200 3 3

equivalents
Property, plant 13,900 8,000 5,900 1 5900 7 7

and equipment
Investments 6300 900 5,400 1 5400 6 6

property
Inventories 2,700 6,000 -3,300 -1 3300 5 -5
Trade and other 760 4,000 -3,240 -1 3240 4 -4

receivables
Investment on 931 835 96 1 96 1 1

Shares
51
Advance and 4,300 3600 700 1 700 2 2
deposits
19 *positive sum
-9 *negative sum
Decision: The smaller rank sum is 9. Don't reject H0
Wilcoxon Rank-Sum Test for Independent Variable
Test-1: RACC wanted to know about the absenteeism of the three companies where
BEXIMCO Limited and Square Pharmaceuticals Limited comes from the front-tier
companies and ACI Limited comes from the mid tier companies.
Solution
With the help of Wilcoxon Rank-Sum Test, the level of absenteeism can be determined.
For this, null and alternate hypothesis is stated as follow:
52
Ho: The mean number of board of directors absenteeism in BEXIMCO Limited is same or
less than the number of absenteeism in Square Pharmaceuticals Limited
H1: The mean number of board of directors absenteeism in BEXIMCO Limited is more
than the number of absenteeism in Square Pharmaceuticals Limited
The test statistic follows the standard normal distribution. At the .05 significance level,
critical value of z is found 1.645. The null hypothesis will be rejected if computed value
of Z is greater than 1.645.
Ranked Number of Absenteeism
BEXIMCO Limited Square Pharmaceuticals

Limited
Year Absenteeism Rank Absenteeism Rank
2011 2 3 1 2
2012 6 7 3 4.5
2013 3 4.5 0 1
2014 4 6 7 8
2015 8 9 9 10
Rank Sum 29.5 25.5
For computing, Z a formula is used where W is the rank-sum of absenteeism in BEXIMCO

Limited. The formula gives:
n1 (n1 +n2 +1) 5 (5+5+1)

W 29.5
2 2
Z=
= 0.417786

n1 n2 (n1 +n2 +1)
12 5.5(5+5+1)
12
53
The computed Z value 0.417786 is less than 1.645, the null hypothesis is not rejected. At 5%
significance level, the evidence does not show that the number of absenteeism is more for
BEXIMCO Limited than Premier Square Pharmaceuticals Limited
Test-2: Now another hypothesis testing is conducted using Wilcoxon Rank-Sum Test to
determine the absenteeism level between Square Pharmaceuticals Limited and ACI Limited.
Using the same significance level the null and alternate hypothesis is as stated:
Ho: The mean number of board of directors absenteeism in Square Pharmaceuticals Limited is
same or less than the number of absenteeism in ACI Limited.
H1: The mean number of board of directors absenteeism in Square Pharmaceuticals Limited is
more than the number of absenteeism in ACI Limited.
Ranked Number of Absenteeism
Square ACI Limited

Pharmaceuticals
Limited
Year Absenteeism Rank Absenteeism Rank
2011 15 7
2012 3 2.5 19 8
2013 0 1 6 4
2014 7 5 3 2.5
2015 11 6 22 9
Rank Sum 14.5 30.5
54
For computing, Z a formula is used where W is the rank sum of absenteeism in Square
Pharmaceuticals Limited. The formula gives:
n1 (n1 +n2 +1) 4(4+ 5+1)

W 14.5
2 2
Z=
= -1.3472

n1 n2 (n1 +n2 +1)
12 4.5(4+5+ 1)
12
As the test statistics of Z is less than the critical value, null hypothesis is not rejected. It can be
concluded that ACI Limited has a significant level of absenteeism in the board of directors
meeting. A minimum number of present is a must for all the directors in a company. More
absenteeism can sometimes create miscommunication, obstacle in decision making and some
conflicts ACI Limited must be concerned about this issue.
Kruskal Wallis Test
The Kruskal-Wallis test is a nonparametric (distribution free) test, and is used when the
assumptions of ANOVA are not met. They both assess for significant differences on a
continuous dependent variable by a grouping independent variable (with three or more
groups). In the ANOVA, we assume that distribution of each group is normally
distributed and there is approximately equal variance on the scores for each group.
However, in the Kruskal-Wallis Test, we do not have any of these assumptions. Like all
non-parametric tests, the Kruskal-Wallis Test is not as powerful as the ANOVA.
Assumptions:
1. We assume that the samples drawn from the population are random.
2. We also assume that the cases of each group are independent.
3. The measurement scale for should be at least ordinal.
55
Application of Kruskal Wallis Test
Mr. Ali is going to invest in a Pharmaceuticals company. He selects three Pharmaceuticals
Company; Beximco Pharmaceuticals, ACI Ltd and Square Pharmaceuticals.
He is going to decide his investment plan according to the different account balances of
these three companies. If the different account balances of the three companies are same
in 95% confidence interval, he is going to invest equally. But, for any difference, he will
proportionately invest according to additional statistical analysis.
Assumptions for the Study:
1. We assume that the samples drawn from the population are random.
2. We also assume that the sample of each population are independent.
3. The measurement scale for test should be at least ordinal.
4. The population variances are not all equal.
Here are the different account balances of three companies.
(In Million)
ACI BEXIMCO Square Pharmaceuticals
Limited Limited Limited
Gross profit 8,200 7,400 10,300
Net cash from operating
activities 50 2,100 6,400
Net cash used in investing
activities 800 650 3,100
Net cash from financing
activities 1,200 2,600 2,200
Dividend paid 200 500 900
Cash and cash equivalents 900 80 2,100
Property, plant and equipment 8,000 28,100 13,900
Investments 900 5,700 6300
Inventories 6,000 3,000 2,700
Trade and other receivables 4,000 26,400 760
Share capital 300 5,900 4,800
Share premium 350 700 2,035
Reserves 1,500 27,800 105
Retained earnings 2,000 17,500 18,900
56
Non-current liabilities 1,700 10,000 1,900
Current liabilities 15,000 37,400 2,300
Current assets 13,000 65,600 7,400
Non-current assets 9,000 35,300 23,500
Finance costs 1,400 5,600 170
Income tax expense 600 41 1,700
With the help of excel, we ranked the data and find out the value H.
Rank Rank Rank

1 2 3
45 42 48
2 26 41
14 11 33
18 30 28
6 9 15
15 3 26
44 57 50
15 37 40
39 32 31
34 55 13
7 38 35
8 12 25
20 56 4
24 52 53
21 47 23
51 59 29
49 60 42
46 58 54
19 36 5
10 1 21
Sum 487 721 616

Avg 24.35 36.05 30.8
11858. 25992. 18972 56823
45 05 .8 .3
3.3059
H 02
Critical 5.9914
Value 65
0.1914
P value 84
57
Step 1: Stating the null and alternate hypothesis
H0: The population distributions are same for the three companies.
H1: The population distributions are not all same for the three companies.
Step 2: Selecting the Level of Significance

The significance level is the probability that we reject the null hypothesis when it is
actually true.
In this case, we select the 0.05 significance level.
= 0.05
Step 3: Selecting the test Statistic:
The test statistic used for the Kruskal-Wallis test is designated by H. Its formula is:
Step 4: Formulating the Decision Rule:

In this problem, there are three populations. Thus K=3.
Degrees of freedom, K-1 = 3-1 = 2.
Refer to the chi-square table of critical values, the critical value for 2 degrees of freedom
and the .05 level of significance is 5.991.
Reject the Null Hypothesis (Accept alternate): If H is greater than 5.991.
Step 4: Making a decision:
58
Because the computed value of H (3.305902) is lower than. The critical value 5.991, we
accept the null hypothesis and reject the alternative hypothesis.
Step 6: Interpreting the Result:
There is enough evidence to conclude that there is a no difference among the distributions
of different accounts of these three companies. So he can invest in any companies and it
will be profitable.
Conclusion
Throughout the term paper we have tried our best to prove our skill acquired from
course F-207: Applied Statistics. We have put our sincere effort to give this report a
presentable shape and make it as precise as possible. We cordially thank our honorable
faculty for providing us with this unique opportunity. We hope we can use the
theoretical and practical knowledge acquired from the report in the subsequent analysis
in future.
59
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University of Dhaka

Md. Taher Jamil

Md. Taher Jamil

Subject: Letter of Transmittal for the Term-Paper.

Md Safiul Alam Mukul;

Chapter Content Page No.

Objectives of the Study

a. To gather knowledge about theoretical and analytical aspects of Applied Statistics

Methodology of the Study

Limitations of the Study

Analytical work is very much comprehensive. It is an accumulation of both information

While preparing this report, we have faced these problems:

What is Hypothesis Testing?

Five Step Procedure for testing a Hypothesis:

State Null Select a Identify Formulate Take a

Step 2: Select a level of Significance:

Step 3: Select the Test Statistic:

Step 4: Formulate the Decision Rule:]

Step 5: Making a Decision:

H0: The mean income of 100 employees is less than or equal to

If no direction is specified in the alternate hypothesis, we use a two-tailed

H0: The mean income of 100 employees is $55000 per year.

Practical Study of ANOVA in Financial Statements

Property, Plant and Equipment

Year ACI Limited BEXIMCO Square

2014 6,540 27,458 18,009

2015 6,596 28,116 13,933

Stating the null hypothesis and the alternative hypothesis

Selecting the Level of Significance

Determining the Test Statistics

The test statistic follows F- distribution

Performing the Calculations and Making Decision

It is convenient to summarize the calculations of the F- statistic in an ANOVA table. The

Anova: Single Factor

Year ACI Limited BEXIMCO Square

At 5% level of significance, the Anova table is calculated in the Excel.

Anova: Single Factor

Year ACI Limited BEXIMCO Square

2013 2,961 3,091 3,091

2014 3,949 2,406 2,737

2015 3,954 2,208 3,310

At 5% level of significance, the Anova table is calculated in the Excel.

Year ACI Limited BEXIMCO Square

2013 1,350 24,648 812

2014 1,950 26,259 766

2015 2,249 27,303 894

At 5% level of significance, the Anova table is calculated in the Excel.

Anova: Single Factor

Cash and Cash Equivalents

Year ACI Limited BEXIMCO Square

2014 525 58 2,162

2015 619 297 3,892

At 5% level of significance, the Anova table is calculated in the Excel.

Anova: Single Factor

Year ACI Limited BEXIMCO Square

2013 343 5,226 3,707

2014 398 6,010 4,819

2015 398 6,911 5,542

At 5% level of significance, the Anova table is calculated in the Excel.

2013 351 251 2,035

2014 402 289 2,035

2015 402 376 2,035

At 5% level of significance, the Anova table is calculated in the Excel.

Anova: Single Factor