Repeat questions 64–66, using J&J’s price–earnings ratio.

Question 64

Use the data given in question 24 of Chap. 2 to compute the correlation coefficient between J&J’s current ratio and the industry’s.

Question 24 of Chap. 2

You are given the following financial ratios for Johnson & Johnson and for the pharmaceutical industry:

(a) Draw a line chart showing the current ratio over time for the industry and for J&J, and compare the two.

(b) Use a bar graph to present the data for the industry and J&J’s current ratio.

Question 66
Use your results from question 65 to compute the standard error of the estimate.

Question 65

Use the data given in question 24 of Chap. 2 to estimate the regression coefficients for a regression of J&J’s current ratio on the pharmaceutical industry’s current ratio.

Question 24 of Chap. 2

You are given the following financial ratios for Johnson & Johnson and for the pharmaceutical industry:

(a) Draw a line chart showing the current ratio over time for the industry and for J&J, and compare the two.

(b) Use a bar graph to present the data for the industry and J&J’s current ratio.

Transcribed Image Text:

Year 79 80 81 82 83 84 85 86 87 88 Year 79 80 81 82 83 84 85 86 87 88 Current ratio Industry 2.30 2.29 2.18 2.12 2.12 2.09 2.19 1.91 1.86 1.93 ROA Industry .11 .11 .10 .11 .11 .10 .10 .10 .09 .12 J&J 2.73 2.55 2.50 2.50 2.66 2.41 2.47 1.40 1.86 1.88 J&J .12 .12 .12 .12 .11 .11 .12 .06 .13 .14 Inventory Turnover Industry 2.17 2.22 2.34 2.30 2.34 2.40 2.27 2.38 2.24 2.27 Pricelearnings Industry 12.04 15.03 28.02 15.19 14.56 14,88 17.98 23.46 35.09 15.98 J&J 2.71 2.70 2.78 2.38 2.28 2.37 2.45 2.33 2.27 2.32 J&J 13.76 15.35 14.79 17.79 15.90 13.14 15.66 35.47 15.50 14.88