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STATlSTlCAl AtAlYSlS
Hltl PR0JFCT

SECTOR: CEMENT SECTOR(SOUTH INDIA)


AlllAtCF uSltFSS SCH00l
UNDER THE GUDENCE OF
PROF.VSHWANATHAAH

5u8Ml11u 8
VENKATA PAVAN KUMAR.CH
SECTON: E
REG NO: 10PG301

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4390398
EXECUTIVE SUMMARY 3
ACKGROUND 3
OECTIVE OF THE STUDY 4
STATISTICAL TOOLS 5
STATISTICAL ANALYSIS 7
LIMITATIONS OF STUDY 14
CONCLUSION 15
IILIOGRAPHY 15




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EXECUTIVE SUMMARY:
This project mainly deals about studying the performance of the different companies in
the cement industries during the years 2001-10 by using different statistical tools in
excel sheet. The input data taken here are the sales, profit and earnings per share of
the 3 companies i.e. Andhra cements and Madras cements. The trend lines are plotted
for each company, linear trend function is used in this case, and this is used for
forecasting sales. Here we applied the statistical tools like descriptive statistics, trend
line, correlation and regression to determine the present scenario and the forecast the
company position irrespective of external factors. We can say this type of analysis using
different tools is useful for the company to plan for the future and make smart decisions.

ACKGROUND
Andhra Cements
Andhra Cements Limited is engaged in the manufacturing and selling of cement. The
Company operates, through a network of dealers for sale of its products. During the
fiscal year ended March 31, 2009 (fiscal 2009), the Company had two operative plants
at Dachepalli, Guntur district (Andhra Pradesh) and Visakhapatnam (Andhra Pradesh)
with installed capacity of 0.80 metric tons per annum (mtpa) and 0.60 metric tons per
annum (mtpa). During fiscal 2009, the production of cement by the Company was 12.26
lakhs tons. ts major markets include Andhra Pradesh, Tamilnadu, Orissa and
Karnataka. The products manufactured by the Company include Ordinary Portland
cement (OPC) and Pretoria Portland cement (PPC).
History : Andhra Cements Limited, incorporated on December 9, 1936 is engaged in
manufacturing and selling of cement. The Goenka Group took over the company in
1995. The two cement plants, located in Vishakapatnam and Dachepalli have a
combined installed capacity of 1.4 million tonne (MT) per annum. The company has
planned to increase the installed capacity to 3.5 MT per annum at an approximate cost
of Rs 4,000 million.
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The company operates, through a network of dealers for sale of its products. During the
fiscal year ended March 31, 2009 (fiscal 2009), the company had two operative plants
at Dachepalli, Guntur district (Andhra Pradesh) and Visakhapatnam (Andhra Pradesh)
with installed capacity of 0.80 MT per annum (mtpa) and 0.60 MT per annum (mtpa).
During fiscal 2009, the production of cement by the company was 12.26 lakh tonne. ts
major markets include Andhra Pradesh, Tamilnadu, Orissa and Karnataka.
Madras Cements
Madras Cements Ltd is the flag ship company of Ramco Group, a well known business
group of South ndia. t is based at Chennai. The main product of the company is
Portland Cement manufactured through the five advanced production facilities spread
over South ndia. The cement capacity is 10.49 million tons per annum.The company is
the fifth largest cement producer in the country. Ramco Supergrade is the most popular
cement brand in South ndia. The company also produces Ready Mix Concrete and
Dry Mortar products. n addition, the company also operates one of the largest wind
farms in the country .
History : n 1950's, investment in Cement ndustry was not attractive due to price
controls and the massive investments required. Only those entrepreneurs who were not
profit minded but cared for country's development came forward in investing in Cement
ndustry.
When Shri. Manubai Shah, Central Minister for ndustries in late fifties came to Madras
to meet the ndustrialists, he called upon Shri P A C Ramasamy Raja and requested
him to start a cement factory in TN . This was readily accepted by Shri PACR and this
marked the birth of "Madras Cements Ltd" in 1961.


OECTIVE OF THE STUDY:
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The objective of the study is to apply the statistical tools for the sales and the profit
between the Andhra cements and the Madras cements and compare their performance
during the years 2001-2010.
STATISTICAL TOOLS: The statistical tools used to measure the performance of
the companies in this study are:
O Correlation
O Regression
O ANOVA
O Descriptive Statistical Tools

CorreIation: The Correlation analysis tool is particularly useful when there are more
than two measurement variables for each of N subjects. t provides an output table, a
correlation matrix that shows the value of CORREL (or PEARSON) applied to each
possible pair of measurement variables. You can use the correlation analysis tool to
examine each pair of measurement variables to determine whether the two
measurement variables tend to move together that is, whether large values of one
variable tend to be associated with large values of the other (positive correlation),
whether small values of one variable tend to be associated with large values of the
other (negative correlation), or whether values of both variables tend to be unrelated
(correlation near 0 (zero)).

Regression: n statistics, regression analysis includes any techniques for modelling
and analyzing several variables, when the focus is on the relationship between
a dependent variable and one or more independent variables. More specifically,
regression analysis helps us understand how the typical value of the dependent variable
changes when any one of the independent variables is varied, while the other
independent variables are held fixed. Most commonly, regression analysis estimates
the conditional expectation of the dependent variable given the independent variables
that is, the average value of the dependent variable when the independent variables
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are held fixed. Less commonly, the focus is on a quantile, or other location parameter of
the conditional distribution of the dependent variable given the independent variables. n
all cases, the estimation target is a function of the independent variables called
the regression function. n regression analysis, it is also of interest to characterize the
variation of the dependent variable around the regression function, which can be
described by a distribution. Regression analysis is widely use
for prediction and forecasting, where its use has substantial overlap with the field
of machine learning. Regression analysis is also used to understand which among the
independent variables are related to the dependent variable, and to explore the forms of
these relationships. n restricted circumstances, regression analysis can be used to
infer causal relationships between the independent and dependent variables.
A large body of techniques for carrying out regression analysis has been developed.
Familiar methods such as linear regression and ordinary least squares regression are
parametric, in that the regression function is defined in terms of a finite number of
unknown parameters that are estimated from the data. Nonparametric regression refers
to techniques that allow the regression function to lie in a specified set of functions,
which may be dimensional. The performance of regression analysis methods in practice
depends on the form of the data-generating process, and how it relates to the
regression approach being used. Since the true form of the data-generating process is
not known, regression analysis depends to some extent on making assumptions about
this process. These assumptions are sometimes (but not always) testable if a large
amount of data is available. Regression models for prediction are often useful even
when the assumptions are moderately violated, although they may not perform
optimally. However, in many applications, especially with small effects or questions
of causality based on observational data, regression methods give misleading results

Trend Iine: A trend line is formed when you can draw a diagonal line between two or more
price pivot points. They are commonly used to judge entry and exit investment timing when
trading securities. t can also be referred to a Dutch line as it was first used in Holland. A trend
line is a bounding line for the price movement of a security. A support trend line is formed when
a securities price decreases and then rebounds at a pivot point that aligns with at least two
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previous support pivot points. Similarly a resistance trend line is formed when a securities price
increases and then rebounds at a pivot point that aligns with at least two previous resistance
pivot points. Trend lines are a simple and widely used technical analysis approach to judging
entry and exit investment timing. To establish a trend line historical data, typically presented in
the format of a chart such as the above price chart, is required. Historically, trend lines have
been drawn by hand on paper charts, but it is now more common to use charting software that
enables trend lines to be drawn on computer based charts. There is some charting software that
will automatically generate trend lines, however most traders prefer to draw their own trend
lines. When establishing trend lines it is important to choose a chart based on a price interval
period that aligns with your trading strategy. Short term traders tend to use charts based on
interval periods, such as 1 minute (i.e. the price of the security is plotted on the chart every 1
minute), with longer term traders using price charts based on hourly, daily, weekly and monthly
interval periods.
Descriptive Statistics: The Descriptive Statistics analysis tool generates a report
of univariate statistics for data in the input range, providing information about the
central tendency and variability of the data.
STATISTICAL ANALYSIS
CorreIation between SaIes and Net Profit of IndividuaI Companies:
Andhra cements:
CorrelaLlon beLween sales and proflL
soles(lo cts) ptoflt
sales(ln crs) 1

roflL 077703328 1

There is a moderately high (positive) correlation between the sales and the profit and
hence an increase in profit can be expected for an increase in the sales.For every 1%
increase in sales there is 0.77% increase in profit.

CorrelaLlon 8eLween roflL and Larnlngs per Share
ptoflt eotoloqs pet
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sbote
roflL 1
earnlngs per
share 0808486422 1

There is a high (positive) correlation between the profit and Earnings per Share.Profit
has high influence on the earnings per share thus giving a positive relationship between
them i.e., a direct relationship of raise if the other increases and decreases with the
other value (profit). For every 1% increase in profit there is 0.8% increase in EPS.


CorrelaLlon 8eLween Larnlngs per share and sales
otoloqs pet sbote soles(lo cts)
Larnlngs per
share 1

sales(ln crs) 0324468178 1


There is a Moderately low correlation between the earnings per share and the sales and
For every 1% increase in EPS there is 0.5% increase in sales.
Madras cements
CorrelaLlon beLween sales and proflL
soles(lo cts) ptoflt
sales(ln crs) 1

roflL 0932737801 1

There is a high correlation between profit and sales. For every 1% increase in sales
there is 0.93% increase in profit
CorrelaLlon 8eLween roflL and Larnlngs per Share
ptoflt otoloqs pet sbote
roflL 1

Larnlngs per share 0080132218 1

There is a Low correlation between profit and earnings per share . For every 1%
increase in profit there is 0.08% increase in EPS
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CorrelaLlon 8eLween Larnlngs per share and
sales
otoloqs pet sbote soles(lo cts)
Larnlngs per
share 1

sales(ln crs) 0183341494 1

There is a low(negative) correlation between the earnings per share and sales.For
every 1% increase in EPS there is 0.18 decrease in sales

REGRESSION STASTISTICS AND ANOVA FOR ANDHRA CEMENTS:

SuMMA8? Cu1u1

eqtessloo 5totlstlcs
MulLlple 8 0777033
8 Square 0603812
Ad[usLed 8
Square 0334288
SLandard Lrror 8613128
CbservaLlons 10


AnCvA

Jf 55 M5 l
5lqolflcooce
l
8egresslon 1 9049268 9049268 1219242 0008177
8esldual 8 3937634 7422042

1oLal 9 149869



coefflcleot
s
5tooJot
J ttot t 5tot lvoloe
lowet
95
uppet
95
lowet
950
uppet
950
nLercepL 1421307 304781 466402 000161 718679 212433 718679 212433
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2 3 3 9 3 9 3
x
varlable
1 2839393
081893
4
349176
3
000817
7
097108
4
474810
6
097108
4
474810
6

According to the analysis we derived a regresssion equation sales=142.15+2.85(profit)
with high confidence and the standard error above.


REGRESSION STASTISTICS AND ANOVA FOR MADRAS CEMENTS:

SuMMA8? Cu1u1

eqtessloo 5totlstlcs
MulLlple 8 0932738
8 Square 0870037
Ad[usLed 8
Square 0833792
SLandard Lrror 3173776
CbservaLlons 10

AnCvA

Jf 55 M5 l
5lqolflcoo
ce l
8egresslo
n 1 3394620
339462
0
333360
4 824L03

8esldual 8 8038282
100728
3

1oLal 9 6200449



coefflcleo
ts
5tooJotJ
ttot t 5tot lvoloe
lowet
95
uppet
95
lowet
950
uppet
950
nLercepL 3381393 1469399
366244
3
000637
9 1993133
877003
3
199313
3
877003
3
proflL 4661798 0637014
731819
9
824L
03 319284
613073
6 319284
613073
6

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According to the analysis we derived a regression equation
sales=538.1593+4.661798(profit) with high confidence and the standard error above.

DESCRIPTIVE STATISTICS:
-un cM-15
nL1SALLS

Mean 189863
SLandard Lrror 4080700147
Medlan 124373
Mode #n/A
SLandard uevlaLlon 1290430691
Sample varlance 1663211369
kurLosls 0003331619
Skewness 123199191
8ange 33134
Mlnlmum 9093
Maxlmum 44227
Sum 189863
CounL 10

According to above analysis average netsales during the year 2001-2010 is 189.863
with standard deviation 129.0430391 maximum number of times the netsales is less
than the mean.
Mu5 cM-15
nL1SALLS

Mean 1323379
SLandard Lrror 2624764226
Medlan 87404
Mode #n/A
SLandard uevlaLlon 8300233273
Sample varlance 6889387242
kurLosls 0868763391
Skewness 0877633274
8ange 218233
Mlnlmum 61834
Maxlmum 280089
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Sum 1323379
CounL 10

According to the above analysis netsales during the year 2001-2010 are 1323.579 with
the standard deviation 830.Skewness is 0.8776352
TREND LINE EQUATIONS:
MADRAS CEMENTS
ear sales(ln crs) x x2 x
excepLed
?
2001 61834 3 23 30917 18373 61834
2002 7063 4 16 28232 4386 7063
2003 62614 3 9 187842 69143 62614
2004 69332 2 4 139064 9443 69332
2003 73898 1 1 73898 119713 73898
2006 10091 0 0 0 1430 10091
2007 137332 1 1 137332 170283 137332
2008 201103 2 4 402206 19337 201103
2009 243617 3 9 736831 220833 243617
2010 280089 4 16 1120336 24614 280089

1323379 3 83 1424271

a b
1430 23283

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By the above trend line analysis we can say that performance of Andhra cements was
low between 2003-2007and performance was good over the other years.

?ear
Sales(ln
crs) x x2 x?
excepLed
? ?
2001 9093 3 23 43463 322 9093
2002 12338 4 16 49432 8279 12338
2003 144 3 9 432 11338 144
2004 10768 2 4 21336 14397 10768
2003 9989 1 1 9989 17436 9989
2006 12337 0 0 0 20313 12337
2007 10121 1 1 10121 23374 10121
2008 44227 2 4 88434 26633 44227
2009 36896 3 9 110688 29692 36896
2010 29434 4 16 117816 32731 29434

189863 3 83 137437


0
300
1000
1300
2000
2300
3000
1 2 3 4 3 6 7 8 9 10
excepLed ?

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a 8
20313 3039




By the above trend line analysis we can say that performance of Andhra cements was
low between 2003-2007and performance was good over the other years. t is more
fluctuating.

LIMITATIONS OF THE STUDY:
The limitations for this study are:
O The data which is collected is limited only for 10 years. t is the small sample and
we cannot get the accurate results to say about the performance of the company.
O Qualitative data is neglected it is not taken into consideration while measuring
the performance.

0
30
100
130
200
230
300
330
400
430
300
1 2 3 4 3 6 7 8 9 10
excepLed ?
?
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EXPECTATIONS FROM STUDY:
Descriptive statistics determine the behavior of the data.
Correlation is used for determining the interdependence of the data.
Regression is used for forecasting future performance based on present data.
Trend line is used for forecasting the performance with respect to time.
CONCLUSION:
From the project we can say that Correlation between sales and profit of Madras
cements is higher than the correlation between sales and profit of Andhra cements.
Madras cements is doing well in the case of the earnings per share when compared to
Andhra cements. And the performance of the Madras Cements is consistent over the
years than compared to Andhra Cements.

IILIOGRAPHY:
O Quantitative Techniques by M.Selva.
O Business statistics by Arora.
O Statistics for managers using Microsoft Excel by Levine, Stephan, Krehbiel,
Berenson
O http://www.andhracements.com
O http://www.madrascements.com

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