Explore BrainMass
Share

Explore BrainMass

    Statistical Tools- Pros and Cons

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    In detail, what statistical tools would apply and how they would be used when analyzing financial information for each of the selected organizations to assess for value. Discuss the pros and cons of each statistic tool.

    Choose one domestic and one global organization from the Financial Times 500 as opposed to Fortune 500 with public financial records, and include a description of the following elements:

    *Ratio analysis
    *Common size analysis
    *Accounting analysis limitations

    © BrainMass Inc. brainmass.com October 10, 2019, 5:25 am ad1c9bdddf
    https://brainmass.com/business/business-math/statistical-tools-pros-cons-504588

    Solution Preview

    Financial Information
    Brainmass student
    N/A
    October 3, 2012
    Unknown

    Financial Information

    IBM (Domestic Company)
    IBM Statistical Tools
    • SPSS Statistics- Since its release in 1968, SPSS has been a popular mathematical program for school scientists, government departments, and firms. This powerful, user-friendly application is suitable with the Windows, Apple, and A Linux systemunix operating-system. Once loaded with data, SPSS can perform a number of mathematical studies with a sequence of pull-down selection. But SPSS has an extra option of allowing users to save frequently used procedures as programs that can be customized and used regularly. (Pros- easily accessible, intuitive, simple to use, data entry software for businesses and students. Cons- to simple to get into system without structure, math can be unreliable, clumsy designs, restricted mathematical facilities).
    • Quest- Primary device for several data exploration operations. These operations consist of data mining organizations, successive styles, similar time sequence, category and regression, and clustering. (Pros- Real-time confirming and metrics, flexible, personalized and computerized workflows, integration with style, growth, develop, analyze and implementation tools. Cons- start up programs has complications and tends to take longer than usual at times).

    Ratio Analysis-IBM-

    FY 2002 FY 2001 FY 2000 FY 1999 FY 1998 FY 1997 FY 1996 FY 1995 FY 1994 FY 1993
    1.21 1.21 1.21 1.09 1.15 1.21 1.20 1.29 1.41 1.18
    0.92 0.92 0.90 0.81 0.67 0.73 0.89 0.95 1.10 0.80
    6.27 6.45 5.84 6.67 8.62 9.32 6.83 6.42 5.95 6.46
    57.45 55.81 61.67 53.99 41.78 38.63 52.70 56.07 60.51 55.71
    13.66 11.29 11.11 11.12 9.83 8.70 7.45 6.57 5.58 10.20
    26.35 31.90 32.40 32.36 36.64 41.37 48.33 54.80 64.53 35.31
    83.80 87.71 94.07 86.35 78.42 80.00 101.03 110.88 125.05 91.02
    53.96 49.57 55.11 41.15 44.31 39.19 37.79 39.06 35.08 31.74
    50.02 49.79 59.67 49.73 40.10 35.95 48.70 53.73 54.53 51.89
    $7,102,000 $7,342,000 $7,474,000 $3,577,000 $5,533,000 $6,911,000 $6,695,000 $9,043,000 $12,112,000 $6,052,000

    "While the current ratio is below the 2:1 rule of thumb, totaling 1.21x in FY 2002, IBM managed to maintain both this ratio as well as its working capital level ($7 billion) stable for the past three years. The quick ratio is only slightly below 1.0x, totaling 0.92x in FY 2002 as inventory makes up a minimal amount of total current assets (7.56% in FY 2002). IBM managed to maintain $5.9 billion in ending cash and cash equivalents in FY 2002, ($418 million decline from FY 2001 levels) following the $2.8 million cash payment for PWC, $2 million cash contribution to fund its personal pension plan (PPP), and $857 million in restructuring projects"(Liaw, 2011).

    Common size analysis-IBM

    Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007
    Taxes 2.85 ...

    Solution Summary

    The pros and cons of the statistics tools are examined.

    $2.19