NISHAAT MILLS

Regressions between Sales, price and per capita income

Managerial Economics
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HARIS PARVAIZ 10255(LEADER) FARHAN ALI 10256

ANUM MAJEED 10293 ZAIN JAVAID 10281

Superior University, Lahore

Regressions between Sales, price and per capita income

Table of Contents
EXECUTIVE SUMMARY COMPANY PROFILE .. 4 .3

Regression Analysis on the Sales of Nishat mills (2004-2009) .................................................... 6

REGRESSION ANALYSIS .......................................................................................................... 7

Interpretation ...................................................................................................................... 8
MULTI REGRESSION ................................................................................................................. 9

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Executive summary

In this project we select the company which issues its quarterly data of sales and other factors. After that we need to collect the data of this company for the last 5 years. We need to see the effect of the sales on any other two factors; like in this project we see the effect of sales on price and per capital income. To see the effect we first collect the data and then enter this data in spss to apply some test. The test which we apply it sees the effect is simple and multiple regressions, and then do analysis of these results.

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Company s Profile
Nishat Mills Limited is a Pakistan-based company engaged in the business of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing, printing, stitching/apparel, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fiber and cloth. It is also engaged in generating, accumulating, distributing and supplying electricity. Effective July 1, 2008, Nishat Apparel Limited (formerly Gulf Nishat Apparel Limited), in which the Company held a 25.72% interest, was amalgamated into the Company.

Nishat has grown from a cotton export house into the premier business group of Pakistan with 5 listed companies, concentrating on 4 core businesses; Textiles, Cement, Banking and Power Generation. Today, Nishat is considered to be at par with multinationals operating locally in terms of its quality products and management skills.

Annual turnover 17 billion Rupees 14 Billion from textiles Earn foreign exchange US $ 236 million Taxes and Levi of 2,080 million Rupees annually

Nishat Mills Limited

Flagship Company established in 1951 Most Modern, Biggest Composite unit of Pakistan Professional and Client Oriented Marketing Green Company ISO 9001 and IKO-TEX100 Certified SA 8000 Certification currently in process
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Regressions between Sales, price and per capita income

NML today has 173,000 spindles, 284 Sulzer shuttle-less looms and 244 TSUDAKOMA air jet looms. NML also has the most modern textile-processing unit, 2 stitching units and Power Generating plant with a capacity of 33.6 MW. NML total export for the year 2000 was Rs. 9.1 billion (US$ 143 million). Due to the application of prudent management.

BOARD OF DIRECTORS:

MianUmerMansha Chairman/Chief Executive Officer Mian Hassan Mansha Mr. Khalid QadeerQureshi Mr. Muhammad Azam Mr. Muhammad Ali Zeb Mr. Syed ZahidHussain Ms. NabihaShahnawazCheema

AUDIT COMMITTEE:

Mr. Khalid QadeerQureshi Chairman/Member Mr. Muhammad Azam Member Ms. NabihaShahnawazCheema Member

CHIEF FINANCIAL OFFICER:

Mr. Badar-ul-Hassan

COMPANY SECRETARY: Mr. Khalid MahmoodChohan AUDITORS:Riaz Ahmad & Company Chartered Accountants LEGAL ADVISOR:Mr. M. Aurangzeb Khan, Advocate,Chamber No. 6, District Court, Faisalabad.02Nishat

Regression:CODE BREAKERS Page 5

Regressions between Sales, price and per capita income

A statistical measure that attempts to determine the strength of the relationship between one dependent variable (usually denoted by Y) and a series of other changing variables (known as independent variables).

The two basic types of regression are linear regression and multiple regressions. Linear regression uses one independent variable to explain and/or predict the outcome of Y, while multiple regressionsuse two or more independent variables to predict the outcome. The general form of each type of regression is: Linear regression: y= a+bX+u .+u

Multiple Regressions: Y= a+b1X1+b2X2+ Where:

Y= the variable that we are trying to predict X= the variable that we are using to predict Y a= the intercept b= the slope
u= the regression residual.

Regression Analysis on the Sales of Nishat mills (2004-2009)

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Year
2005-2006 -1 -2 -3 -4 2006-2007 -1 -2 -3 -4 2007-2008 -1 -2 -3 -4 2008-2009 -1 -2 -3 -4 2009-2010 -1 -2 -3 -4

Sale Rupees(000)
3504323 3724354 3854622 3906543 3922234 3984565 4009124 4053454 4056576 4103456 4277037 4305465 4455645 4504354 4658765 4706543 5103456 5347654 5706543 6136659

Price Rupees(000)
2100 2150 2200 2250 2500 2555 2610 2800 3236 3300 3453 3460 3540 3570 3600 3656 3780 3800 3850 4000

Per capital income Rupees(000)

608 608 608 608 652 652 652 652 750 750 750 750 950 950 950 950 1085 1085 1085 1085

HYPOTHESIS:H0:There is no relationship between Price and Sale. H1: There is relationship between Price and Sale. H0: There is no relationship between per capital income Sale and Sale. H1:There is relationship between per capital income and Sale.

REGRESSION ANALYSIS
(Simple Regression) CODE BREAKERS Page 7

Regressions between Sales, price and per capita income

(Price effect on Sales)
Model Summary Std. Error of the Model 1 R .839a R Square .704 Adjusted R Square .687 Estimate 3.84729E5

a. Predictors: (Constant), price of the mound

ANOVA Model 1 Regression Residual Total Sum of Squares 6.325E12 2.664E12 8.989E12 df

Mean Square 1 18 19 6.325E12 1.480E11

F 42.730

Sig. .000
a

a. Predictors: (Constant), price of the mound b. Dependent Variable: Sales

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) price of the mound a. Dependent Variable: Sales B 1.646E6 887.768 Std. Error 432440.080 135.810 .839 Coefficients Beta t 3.806 6.537 Sig. .001 .000

Interpretation:-

Simple regression was conducted to investigate how much the Sales effect.The results was statistically significant F = 42.730, p>0.05. The adjusted R2 value was .687. This indicates that 68.7% of the variance sale due to independent variable. According to Cohen (1988), this is large effect.

SIMPLE REGRESSION
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Regressions between Sales, price and per capita income

(Per capital income effect on sales)
Model Summary Std. Error of the Model 1 R .916a R Square .840 Adjusted R Square .831 Estimate 2.82970E5

a. Predictors: (Constant), percapinc ANOVAb Model 1 Regression Residual Total a. Predictors: (Constant), percapinc b. Dependent Variable: Sales Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) percapinc a. Dependent Variable: Sales B 1.677E6 3385.937 Std. Error 289144.997 348.748 .916 Coefficients Beta t 5.799 9.709 Sig. .000 .000 Sum of Squares 7.548E12 1.441E12 8.989E12 df 1 18 19 Mean Square 7.548E12 8.007E10 F 94.262 Sig. .000a

Interpretation:Simple regression was conducted to investigate how much the Sales effect. The results was statistically significant F = 94.262, p<0.05. The adjusted R2 value was 0.831. This indicates that 83.1% of the variance sale due to independent variable. According to Cohen (1988), this is large effect.

MULTI REGRESSION
(Both price and income effect on sales)
Model Summary

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Std. Error of the Model 1 R .916a R Square .840 Adjusted R Square .821 Estimate 2.91152E5

a. Predictors: (Constant), price of the mound, percapinc ANOVAb Model 1 Regression Residual Total Sum of Squares 7.548E12 1.441E12 8.989E12 df 2 17 19 Mean Square 3.774E12 8.477E10 F 44.520 Sig. .000a

a. Predictors: (Constant), price of the mound, percapinc b. Dependent Variable: Sales Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) percapinc price of the mound a. Dependent Variable: Sales B 1.670E6 3345.454 12.697 Std. Error 327320.485 880.692 252.250 .905 .012 Coefficients Beta t 5.102 3.799 .050 Sig. .000 .001 .960

Regression equation
Sale= 1.670 + 3345.454(Price) + 12.697(Income) + e

Interpretation:Multi regression was conducted to investigate how much the Sales effect. The results was statistically significant F = 44.520, p<0.05. The adjusted R2 value was 0.821. This indicates that 82.1% of the variance sale due to independent variable. According to Cohen (1988), this is large effect.

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