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The two regressions below show Profitability for companies from the Forbes 500 list as a function of company specifics. Conduct a Partial F-Test to analyze
The two regressions below show Profitability for companies from the Forbes 500 list as a function of company specifics. Conduct a Partial F-Test to analyze if adding the variables Assets and Sales is worthwhile. Use a level of significance of 5%. Show all of your work in the space below; correct but unsupported answers will be assigned a score of zero. Provide a verbal conclusion of your findings.
ANOVA | df | SS | MS | F | ANOVA | df | SS | MS | F | |
Regression | 1 | 28775089 | 28775089 | 106.69 | Regression | 3 | 32844180 | 10948060 | 49.17 | |
Residual | 77 | 20768358 | 269719 | Residual | 75 | 16699267 | 222657 | |||
Total | 78 | 49543447 | Total | 78 | 49543447 | |||||
Coefficient | t Stat | P-value | Coefficient | t Stat | P-value | |||||
Intercept | -144.18 | -2.13 | 0.04 | Intercept | -178.83 | -2.75 | 0.00 | |||
Employees | 9.42 | 10.33 | 0.00 | Assets | 0.00 | 0.02 | 0.98 | |||
Sales | 0.09 | 3.27 | 0.00 | |||||||
Employees | 0.88 | 0.38 | 0.71 |
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