For this question use Lecture 3.xlsx file. Perform the following calculations and answer the questions: 1) For each firm in year 2019 compute the growth rate in sales between 2019&2020. What is the average and median sales growth rate? Compare this with the growth rates we computed in class (between 2020&2021 ). In which year revenue grew faster? 2) In year 2019, group all stocks into quintiles based on the P/E ratio. For each quintile, compute: a. Median growth rate in revenue between 2019&2020, b. Mean growth rate in revenue between 2019&2020, c. Standard deviation of revenue growth rates between 2019&2020. Winsorize revenue at the 5% and 95% percentiles. Compare your results with what we computed in class. Do you see the same pattern? 3) Compute the correlation between raw (unwinsorized) revenue growth and P/E rank. Next, compute the same correlation between: a. Revenue growth rate winsorized at 1% and 99% percentiles and P/E rank, b. Revenue growth rate winsorized at 5% and 95% percentiles and P/E rank. Comment on the results. 4) In year 2019, group all stocks into quintiles based on the P/E ratio. For each quintile, compute: a. The total number of firms, b. The number of firms that grew EBITDA between 2019&2020, c. Fraction of firms that grew EBITDA between 2019&2020. (Compute fraction as the number of firms in (b) divided by the number of firms in (a)). Comment in the results. 5) In year 2019, group all stocks into quintiles based on the P/E ratio. For each quintile, compute: a. The total number of firms, b. The number of firms that grew EPS between 2019&2020, c. Fraction of firms that grew EPS between 2019&2020. (Compute fraction as the number of firms in (b) divided by the number of firms in (a)). Comment in the results. . For this question use Lecture 3.xlsx file. Perform the following calculations and answer the questions: 1) For each firm in year 2019 compute the growth rate in sales between 2019&2020. What is the average and median sales growth rate? Compare this with the growth rates we computed in class (between 2020&2021 ). In which year revenue grew faster? 2) In year 2019, group all stocks into quintiles based on the P/E ratio. For each quintile, compute: a. Median growth rate in revenue between 2019&2020, b. Mean growth rate in revenue between 2019&2020, c. Standard deviation of revenue growth rates between 2019&2020. Winsorize revenue at the 5% and 95% percentiles. Compare your results with what we computed in class. Do you see the same pattern? 3) Compute the correlation between raw (unwinsorized) revenue growth and P/E rank. Next, compute the same correlation between: a. Revenue growth rate winsorized at 1% and 99% percentiles and P/E rank, b. Revenue growth rate winsorized at 5% and 95% percentiles and P/E rank. Comment on the results. 4) In year 2019, group all stocks into quintiles based on the P/E ratio. For each quintile, compute: a. The total number of firms, b. The number of firms that grew EBITDA between 2019&2020, c. Fraction of firms that grew EBITDA between 2019&2020. (Compute fraction as the number of firms in (b) divided by the number of firms in (a)). Comment in the results. 5) In year 2019, group all stocks into quintiles based on the P/E ratio. For each quintile, compute: a. The total number of firms, b. The number of firms that grew EPS between 2019&2020, c. Fraction of firms that grew EPS between 2019&2020. (Compute fraction as the number of firms in (b) divided by the number of firms in (a)). Comment in the results
