# Buisness decision making

Scenario:
You are working as a financial analyst for a company that manufactures electronic medical gadgets for use in the hospitals etc. This company is known by the name of Meditech Inc. The Chief Executive Officer of the company has looked at the previous annual reports of the company to get an idea of how the company is performing with respect to the net income being generated over the years. He has the following information with him:
Year Sales Expenses Net Income Year Sales Expenses Net Income
1995 CAN \$ 15,000 CAN \$ 20,000 2004 CAN \$ 28,000 CAN \$ 55,000
1996 20,000 25,000 2005 30,000 60,000
1997 24,000 30,000 2006 40,000 90,000
1998 20,000 40,000 2007 22,000 45,000
1999 18,000 35,000 2008 15,000 34,000
2000 25,000 50,000 2009 25,000 52,000
2001 20,000 45,000 2010 35,000 62,000
2002 30,000 65,000 2011 16,000 38,000
2003 24,000 45,000 2012 28,000 56,000
He thinks that you are the right person for getting some more information extracted from the data that he has. Therefore, he calls you and asks you to do the following:
2.1 Create (calculate) information for decision making by summarizing data for net income for Meditech Inc. using representative values i.e. calculating the mean, median and mode as discussed in class.
2.2 Analyze the results you obtain in 2.1 to draw conclusions about the net income of Meditech Inc. using your knowledge from the class, what does these calculated values i.e. mean, median and mode tell you about the net income of the company in question?
2.3 Analyze data for net income of Meditech Inc. using measures of dispersion (standard deviation) to inform about the net income stream of Meditech Inc. Show by calculating the range (as discussed in class) within which approx. 95% of the net income values fall using the mean.
2.4 Explain how quartiles, percentiles and the correlation coefficient (correlation between the sales expense and the net income) are used to draw useful conclusions in Meditech Inc. context. First, calculate the first, second and third quartiles for the given net income data. Also, calculate the 80th percentile of the net income data. Calculate the correlation coefficient between sales expenses (X) and net income (Y).