...Modeling Credit Risks with Enterprise Miner™ Tanu Aggarwal Meryl Lo Zhouzghzu “Jack” Liang Sallie Smith April 15, 2016 0 MIS6324.503/BUAN 6324.503 Table Of Contents Executive Summary ............................................................................................................... 2 1. Project Motivation........................................................................................................... 3 2. Data Description .............................................................................................................. 4 3. Data Preprocessing-Variable Exploration, Imputation and Transformation...................... 5 4. Variable Selection ............................................................................................................ 6 5. Descriptive Statistics of Data ......................................................................................... 11 6. Model Selection............................................................................................................. 12 7. What is a Regression Model? ......................................................................................... 13 8. Logistic Regression Model - Stepwise............................................................................. 14 9. Chosen Models .............................................................................................................. 15 10. Analyzing Stepwise Regression Model:...
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...FORECASTING FINANCIAL STATEMENTS: PROFORMA ANALYSIS Roger Clarke and Grant McQueen August 2001 ABSTRACT This teaching note explains why and how managers project financial statements into the future. The note is designed for an introduction to corporate finance class. The note prepares students for either a case such as Clarkson Lumber or a real-word project in which proforma statements are needed. This note explains how to build a proforma balance sheet and intentionally does not include a complete proforma income statement so that the students will have to demonstrate some ingenuity when doing the follow-on case or project. The note is a nice supplement to both the advance and remedial corporate finance text books. The more advanced books (e.g., Ross, Westerfield, and Jaffe) typically give short shrift to the topic of forecasting and the more remedial text books (e.g., Block and Hirt) typically build the forecasted statements presupposing the manager knows production projections (e.g. the type, number, and price of units to be bought, produced, and sold). Roger Clark is with Analytic-TSA Global Asset Management and an Adjunct Professor in the Marriott School at Brigham Young University. Grant McQueen is the William Edwards Professor of Finance in the Marriott School at Brigham Young University. The authors thank colleges at BYU and ASU and the research assistance and students for their contributions. Send correspondence to Grant McQueen, 671...
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...Background In early January 2006, Littlefield Technologies (LT) opened its first and only factory to produce its newly developed Digital Satellite System (DSS) receivers. Littlefield Technologies mainly sells to retailers and small manufacturers using the DSS’s in more complex products. Littlefield Technologies charges a premium and competes by promising to ship a receiver within 24 hours of receiving the order, or the customer will receive a rebate based on the delay. The product lifetime of many high-tech electronic products is short, and the DSS receiver is no exception. LT managers have decided that, after 268 days of operation, the plant will cease producing the DSS receiver, retool the factory, and sell any remaining inventories. As this is a short life-cycle product, managers expect that demand during the 268 day period will grow as customers discover the product, eventually level out, and then decline. In the initial months, demand is expected to grow at a roughly linear rate. Demand is then expected to stabilize. Eventually, demand should begin to decline at a roughly linear rate. Although orders arrive randomly to LT, management expects that, on average, demand will follow the trends outlined above. Management’s main concern is managing the capacity of the factory in response to the complex demand pattern. Delays resulting from insufficient capacity undermine LT’s promised lead times and ultimately force LT to turn away orders. In particular, if an order’s...
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...QMM 241 – HW#5 – Multiple Regression 13.21 – Data It is cross-sectional and the unit of observation is a single Noodles restaurant. 13.22 – Data conditioning Yes the X and Y data is well-conditioned. The Y variable will be the Sales/SqFt which we will be able to figure out with a formula containing all the X variables and the variable magnitudes are all similar in all categories. 13.23 – Predicted signs Variable | Sign | Reason | Seats-Inside | Positive | The larger the size of the restaurant, the higher the sales will be. | Seats-Patio | Positive | The higher number of seats, the higher the revenue will be. | MedIncome | Positive | The higher the income of customers, the higher the sales will be. | MedAge | Positive | The older the potential customers, the higher the revenue will be. | BachDeg% | Positive | More education would be positively correlated with higher income so there will be higher revenue like Income. | 13.24 – Sample Size 75/5=14.8. The data set meets both Evan’s and Donae’s Rules. 13.25 – Regression The estimated regression equation is = 429.5114 − 1.8149Seats-Inside + 1.2719Seats-Patio − 2.1021MedIncome − 0.0158MedAge + 8.6604BachDeg%. These signs do not match our a priori reasoning for Seats-Inside, MedIncome, and MedAge. Regression Analysis | | | | | | | | | | | | | | R² | 0.233 | | | | | | Adjusted R² | 0.177 | n | 74 | | | | R | 0.483 | k | 5 | | | | Std. Error | 124.529 | Dep. Var...
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...PHEB 609: Categorical Data Analysis Homework 6 1. A study used logistic regression to determine characteristics associated with Y = whether a cancer patient achieved remission (1 = yes). The most important explanatory variable was a labeling index (LI) that measures proliferative activity of cells after a patient receives an injection of tritiated thymidine. It represents the percentage of cells that are “labeled”. Table 7.1 shows the grouped data. Table 6.1 Data for Problem 1 on Cancer Remission a. Fit a logistic regression model to the data using LI to predict π = P(Y = 1). State the prediction equation. Logit π (X) = -3.7714 + 0.1448 (LI) b. Use the model fit equation to estimate by hand the probability of remission when LI=8 π (8) = e -3.771 +0.1449 (8) 1 + e -3.771 + 0.1449 (8) = 0.068 c. Obtain the value of LI for which the predicted probability of remission is 0.5 . π (X) = e -3.771 +0.1449 (X) 1 + e -3.771 + 0.1449 (X) = 0.5 e -3.771 + 0.1448 (LI) = 0.5[ 1 + e -3.771 + 0.1448 (LI)] e -3.771 + 0.1448 (LI) = 0.5 + 0.5 e -3.771 + 0.1448 (LI) e -3.771 + 0.1448 (LI) - 0.5 e -3.771 + 0.1448 (LI) 0.5 e -3.771 + 0.1448 (LI) = 0.5 e -3.771 + 0.1448 (LI) = 1 -3.7714 + 0.1448 (LI) = In (1) 0.1448 (LI) = 3.7714 LI = 3.7714/0.1448 =26. d. Conduct aWald test for the LI effect. Interpret...
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...|Name: Ritika Kanodia | |Roll No. 30 | |Semester: 6th | |Supervisor: Mr. Shantanu P.Chakraborty | |Industry: Sugar Industry | |Title: Impact of Government allocation on the Sugar Industry | Dissertation submitted in partial fulfillment of the requirements of the Undergraduate Degree in Bachelor of Business Administration (Honours) J. D. Birla Institute at the Jadavpur University at Kolkata 13/06/2011 The Controller of Examination, Jadavpur University, Kolkata Respected sir, This research work has been done by me and is an original work. The references used have been mentioned in the bibliography. My University Registration no. is 104748 of 2008-2009 and my sixth semester examination...
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...|Effectiveness analysis of an IMC plan – analysis on Djuice. | |Research Report | | | | | Table of Contents Contents Executive Summary 3 Background 4 Statement of the Problem 11 Approach to the Problem 12 Research Design 14 Data Analysis 15 Results 16 Limitation and Caveats 21 Conclusion and Recommendations 22 Exhibit 23 Reference 27 Executive Summary I am going to conduct a research project on “Effectiveness analysis of an IMC plan – analysis on DJUICE”. Integrated marketing communication is integration of all marketing tools, approaches, and resources within a company which maximizes impact on consumer mind and which results into maximum profit at minimum cost. It aims to ensure consistency of message and the complementary use of media. To be an Effective brand IMC plan plays a major role. Effectiveness of a brand is measured by consumer preference. Advertising and other promotional tools, Word of Mouth, Service quality, Tariff and Offer etc are the variables for preferring a mobile phone. The objective is to identify the effect of each factor on preference of Djuice. This research project could act as the guideline to estimate what the Djuice users expect from the company and what influence...
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...few years, a pawn broking has taken place in our country. It has been started since the 15th century which was introduced by the Chinese traders during the Malacca Sultanate. Then, it continued to expand after the discovery of tin mining in Larut in the 19 century. Pawn broking can be traced back to at least 3,000 years in ancient China. It also has been found in the earliest written histories of Greek and Roman civilizations. According to the Islamic Financial Services Board (IFSB), the Ar- Rahnu scheme can demonstrate its roles as a viable microcredit product of the financial institution in meeting the different customer requirements. Firstly, it represents a credit channel to those who want to use Ar-Rahnu scheme to obtain financial resources to meet their daily financial requirements; and secondly, it can be a credit channel to those who requires temporary working capital, particularly for small business. The objective of Ar-Rahnu is to create an alternative financing channel to the conventional pawn broking, that is not only more transparent but it also more compliant with Shari’ah principles. Ar-Rahnu is a form of microcredit product the borrower places their valuable assets such as gold or jewellery as collateral for the financing. In conventional pawn broking, the interest is charge based on the loan. On the other hand, Ar-Rahnu has no interest but it charges on safekeeping service. 1.2 BACKGROUND OF THE ORGANIZATION 1.3.1 BANK RAKYAT Bank...
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...framework was designed based on the literature and hence two hypotheses were formulated. The samples were selected by Proportionate Stratified Sampling method. The data were collected by distributing 10 items questionnaires to 50 retailers under different categories in Dhaka. The questionnaire was developed on the basis of exploratory research which were used to measure retailers attitude. Data collected were sorted out and keyed in into SPSS and were analyzed using descriptive statistics to answer the research question. Using the Factor analysis we have extracted four factors and named those factors as Manufacturer’s Production Standard, Managerial Efficiency, Promotional Capability and Customer Solution Capability. The result of the Multiple Regression analysis showed that there is a significant relationship between retailers’ attitude (dependent variable) and the factors determined in the factor analysis (independent variables). Together the independent variables explained 67.9% of the variance of the dependable variables whereas the remaining 32.1% was due to unidentified variables. Therefore the results of the study definitely play a vital role and leave an ever lasting impact to be used in decision making by retailers and the entire company as a whole....
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...financial institution might be fraught with unmanageable risks for the purpose of maximizing its potential return. In such a situation, the banking financial institutions might find itself in serious financial distress instead of improving its financial health. Consequently, not only the depositors but also the general shareholders will be deprived of their money from the bank. The deterioration of loan quality will also affect the intermediation efficiency of the financial institutions and thus the economic growth process of the country. This establishes the fact that banks should provide increasing emphasis on various analytical tools and techniques for screening proposals and loan decision taking. Credit Worthiness Analysis is one of the most important activities before sanctioning any credit to a new borrower as well as existing borrower to avoid any default risk and for improving the operational efficiency of nationalized and private sector commercial banks. 1.2 Rational of the study: The principal function of the bank is to lend. Lending comprises a very large portion of a bank’s total activities. Sound lending practice therefore, is very important for profitability and success of a bank. Like other financial intermediary, commercial banks also intermediate between the savers and borrower to mobilize the financial surplus of the savers and allocate these savings to the creditworthy borrowers of different sectors of the economy. In this way...
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...few years, a pawn broking has taken place in our country. It has been started since the 15th century which was introduced by the Chinese traders during the Malacca Sultanate. Then, it continued to expand after the discovery of tin mining in Larut in the 19 century. Pawn broking can be traced back to at least 3,000 years in ancient China. It also has been found in the earliest written histories of Greek and Roman civilizations. According to the Islamic Financial Services Board (IFSB), the Ar- Rahnu scheme can demonstrate its roles as a viable microcredit product of the financial institution in meeting the different customer requirements. Firstly, it represents a credit channel to those who want to use Ar-Rahnu scheme to obtain financial resources to meet their daily financial requirements; and secondly, it can be a credit channel to those who requires temporary working capital, particularly for small business. The objective of Ar-Rahnu is to create an alternative financing channel to the conventional pawn broking, that is not only more transparent but it also more compliant with Shari’ah principles. Ar-Rahnu is a form of microcredit product the borrower places their valuable assets such as gold or jewellery as collateral for the financing. In conventional pawn broking, the interest is charge based on the loan. On the other hand, Ar-Rahnu has no interest but it charges on safekeeping service. 1.2 BACKGROUND OF THE ORGANIZATION 1.3.1 BANK RAKYAT Bank...
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..._____________________________________________________________________ CREDIT Research Paper No. 01/05 _____________________________________________________________________ Reducing Child Malnutrition: How Far Does Income Growth Take Us? by Harold Alderman, Simon Appleton, Lawrence Haddad, Lina Song and Yisehac Yohannes _____________________________________________________________________ Centre for Research in Economic Development and International Trade, University of Nottingham 2 The Centre for Research in Economic Development and International Trade is based in the School of Economics at the University of Nottingham. It aims to promote research in all aspects of economic development and international trade on both a long term and a short term basis. To this end, CREDIT organises seminar series on Development Economics, acts as a point for collaborative research with other UK and overseas institutions and publishes research papers on topics central to its interests. A list of CREDIT Research Papers is given on the final page of this publication. Authors who wish to submit a paper for publication should send their manuscript to the Editor of the CREDIT Research Papers, Professor M F Bleaney, at: Centre for Research in Economic Development and International Trade, School of Economics, University of Nottingham, University Park, Nottingham, NG7 2RD, UNITED KINGDOM Telephone (0115) 951 5620 Fax: (0115) 951 4159 CREDIT Research Papers are distributed free of charge to members...
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...natural logarithm, mean, and standard deviation Course Description: The role of statistical evidence in the formation of inference and in the selection of strategies in solving business problems is developed. Probability and probability distributions are studied as a basis of statistical inference. An introduction to multivariate analysis is provided, which includes analysis of variance and regression methods. Specifically, the course covers in order most of the material in the following chapters of the text: Chapter Topic 1 Data and Statistics 2 Descriptive Statistics: Tabular and Graphical Presentations 3 Descriptive Statistics: Numerical Measures 4 Introduction to Probability 5 Discrete Probability Distributions 6 Continuous Probability Distributions 7 Sampling and Sampling Distributions 8 Interval Estimation 9 Hypothesis Tests 10 Statistical Inference About Means and Proportions With Two Populations 11 Inferences About Population Variances 12 Tests of Goodness of Fit and Independence 14 Simple Linear Regression 15 Multiple Regression 17 Index Numbers Prerequisites: INFSYS 5800 (may be taken concurrently) and ECON 4105 with a minimum grade of a C. Course Objectives: Students will develop sufficient skills in using basic statistical methods that they can apply them to real problems. They will be able to demonstrate their mastery of this material by...
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...the next few years. In the last four quarters, we have successfully launched the six customer tailored products for three regions. For each distribution channel, we chose specific packages to meet our distributors’ requirement on packaging. By investing in reduction of setup time, we were able to change our production faster in order to meet changes in customers’ preference and market trend. We also invested in production equipment thereby reducing batch size to support our LEAN manufacturing philosophy. In doing so, we successfully attained production flexibility while incurred only a small amount of extra interest expense due to the early investment in long-term equities that spread out investment cost during the whole machine life. Also, our credit rating was consistently the best in the industry, proving that we are headed in the right direction. With the highest AAA credit rating, we had an advantage of taking banks loans at a low cost, which, in turn, further lowered our total cost. For next year, as we continue to price specific products more carefully, while keeping the average market prices in mind, it will allow us to launch more region specific products and continue to innovate and improve our products which will set higher standards of success and expect higher customer...
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...2012-2013 PAWNSHOPS AND BEHAVIORAL ECONOMICS 193 PAWNSHOPS, BEHAVIORAL ECONOMICS, AND SELF-REGULATION SUSAN PAYNE CARTER* AND PAIGE MARTA SKIBA** I. Introduction Pawnbroking is the oldest source of credit.1 There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University...
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