Question
An analyst would like to determine whether there is a pattern to earnings per share for the Price Company, which operated a wholesale/retail cash-and-carry business
An analyst would like to determine whether there is a pattern to earnings per share for the Price Company, which operated a wholesale/retail cash-and-carry business in several states under the name Price Club. The data are shown in Table P-20. Describe any patterns that exist in these data.
a. Find the forecast value of the quarterly earnings per share for Price Club for each quarter by using the naive approach (i.e., the forecast for first-quarter 1987 is the value for fourth quarter 1986, .32).
b. Evaluate the naive forecast using MAD (Mean Absolute Deviation).
c. Evaluate the naive forecast using MSE (Mean-Squared Error) and RMSE (Root Mean-Squared Error).
d. Evaluate the naive forecast using MAPE (Mean Absolute Percentage Error).
e. Evaluate the naive forecast using MPE (Mean Percentage Error).
f. Write a memo summarizing your findings.
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