WEEKLY EXTRA ACTIVITY 4

SPREADSHEET LINK : https://docs.google.com/spreadsheets/d/1jEbXJG9znnraNe4QiQnutMq41MCVlpT16yaiqeIZiPo/edit#gid=0

   3) X1 : Current ratio , X2: Quick ratio , X3: Cash ratio 

Scatter plot between i) X1 and X2  - Scattered around the origin (does not have a great relation )

                                      ii) X2 and X3 - Scattered around the line which passes through the origin 

                                      iii) X3 and X1 - more scattered and has minimal relation in between 

Covariance 

CR and QR : -0.61812

QR AND AR : 1.405648422

AR AND CR : 0.018364

Standard deviation 

CR and QR : 1.227698

QR AND AR :1.340831105

AR AND CR :  1.1026

mean 

CR : -0.00205

QR : -0.01279

AR : -0.02124

Interpretation:

• Standard Deviation (SD):

  • The standard deviation measures the dispersion or spread of a set of values around the mean.

  • For CR and QR, the standard deviation is 1.227698. This means that the values of CR and QR tend to deviate from their respective means by approximately 1.23 units on average.

  • For QR and AR, the standard deviation is 1.340831105. This means that the values of QR and AR tend to deviate from their respective means by approximately 1.34 units on average.

  • For AR and CR, the standard deviation is 1.1026. This means that the values of AR and CR tend to deviate from their respective means by approximately 1.10 units on average.

• Mean:

  • The mean, or average, is the central value of a set of numbers.

  • For CR, the mean is -0.00205. This means that the average value of CR is approximately -0.00205.

  • For QR, the mean is -0.01279. This means that the average value of QR is approximately -0.01279.

  • For AR, the mean is -0.02124. This means that the average value of AR is approximately -0.02124.

• Covariance:

  • Covariance measures the degree to which two variables change together.

  • For CR and QR, the covariance is -0.61812. This means that CR and QR tend to move in opposite directions.

  • For QR and AR, the covariance is 1.405648422. This means that QR and AR tend to move in the same direction.

  • For AR and CR, the covariance is 0.018364. This means that AR and CR have a weak tendency to move in the same direction.