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STANDARD DEVIATION AND VARIANCE OF AMAZON COMPANY
Standard deviation and variance are statistical measures of variability. They depict how a given set of distribution or data is stretched or squeezed. This measures of dispersions are non negative real numerical figures that is normally zero when all the data are similar and normally tend to increase as the data turns to be more diverse. Amazon is one of the Fortune 500 companies. Data for 2011,2012,2013,2014 and 2015 of the sales in shares is observed to come up with the analysis of the above measures of dispersions. The following is an analysis of the shares data of the Amazon company in the 5 years.
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STANDARD DEVIATIONS AND VARIANCES FOR THE RESPECTIVE YEARS
2011 –Standard Deviation was $ and variance was $2.8E Standard Deviation was $ and variance was $4.56E Standard Deviation was $ and variance was $6.77E Standard Deviation was $ and variance was $9.6E Standard Deviation was $ and variance was $1.39E+13 The overall values of the two measures were $ for the standard deviation and 6.86E+12 Stndard deviation and variances are measures of variability.They explain how precise the data is.
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GRAPH OF STANDARD DEVIATION
The values was increasing as years progressed.
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GRAPH OF VARIANCES Value in 2014 was largest while least in 2015
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ANALYSIS AND INTERPRETATION OF THE OVERALL STANDARD DEVIATION AND VARIANCE
The observed overall standard deviation is while the variance is 6.86E+12 The two measures explain how precise the data is.Since both of the measures are large, we can conclude that the data of the shares in Amazon for the five years are accurate. The measures are large and this indicates that the mean of the shares is far from them. This should be a concern to the management of the company.
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ROLE OF STANDARD DEVIATION IN FINANCIAL ANALYSIS.
Standard deviation is used by financial analysts to measure the consistency through which returns of the company are generated. Larger values of the standard deviations indicate that there is a large degree in terms of risk. Standard deviations are used in fixing the mutual funds and the investing of the hedge funds. Standard deviations should not be taken as a good measurement of how worth the financial situation is.
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ROLE OF STANDARD DEVIATION IN A BUSINESS SETTING
The following are the key roles of the standard deviation in any business setting: Standard deviation are used to monitor the growth of a business since it is a measure of variability Standard deviation makes the owner of the business to note the pit falls of the business since it shows how far the data is from the mean The above are the main roles of the standard deviation.
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RANGE IN DATA Standard deviation and variances are not regarded to be the best measures of dispersion and variability. The range is the simplest measure and regarded to be the best measure for this. The formula of range is: Maximum Value- Minimum Value Range suggest intuitively how the data is spread out.
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A GRAPH SHOWING DATA FOR ALL THE YEARS
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EXPLANATION The above graph indicates that the data in the years assumed the concept of time series. This can easily be observed because of the heaps and jumps in the graph. One can easily predict the next year’s value of shares
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References 10-K. (2016). Sec.gov. Retrieved 2 October 2016, from mzn x10k.htm Data Analysis in Excel. (2016). Excel-easy.com. Retrieved 2 October 2016, from
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