FM WCM Analysis

BHUSHAN STEEL
Interpretations of the regressed output
Current ratio: Current ratio is defined as the total liquidity of the firm. The ideal current ratio is 2 :1 which means that ideally the current assets should be more , should be twice than that of current liabilities as the ratio states that current ratio = current assets /current liabilities higher the liquidity of the firm lower is the risk ,lower is the profit.
Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.473085236 0.223809641 0.029762051 1.633745573 6
ANOVA Significance F 0.343313
df Regression Residual Total 1 4 5
SS 3.07850161 10.6764984 13.755
MS 3.078501605 2.669124599
F 1.153375008
Coefficients Intercept Current (times) ratio 2.872138457 1.753263741
Standard Error 3.14134405
t Stat 0.558125347
P-value 0.60652112
Lower 95% -6.968506
Upper 95% 10.4750331
Lower 95.0% -6.968505583
Upper 95.0% 10.475033
2.67436145
1.073952982
0.343312664
-4.553079
10.2973562
-4.553079306
10.297356
Interpretations of the regressed output : R square is roughly 22.2% which shows that the regressed model is not relevant because that means that 22.2% of the variation in ROCE IS explained by current ratio Standard error basically shows that how much is the data dispersed which is around 1.63.
The x variable is in positive which clearly states that there is a direct relationship between current ratio and ROCE because an increase in the value of the current ratio will lead to a increase in the value of ROCE as the equation here is Y=1.75 + 2.87X X here stand for current ratio The p value is around 0.34 which shows that the value of the slope is significant. Correlation is coming out to be 0.47 which shows the direct relationship between the ROCE and the current ratio and further confirms the positive slope.
Raw material inventory holding period : Raw material inventory holding period is the time taken to convert the raw materials into work in progress; it is not advisable for the firm to show a higher raw material inventory holding period as it increases the time for the complete manufacture Our analysis shows :
Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.8333264 0.6944329 0.6180412 1.0250701 6
SS 9.55192508 4.20307492 13.755
MS 9.55192508 1.05076873
F 9.0904162
Coefficients Intercept 8.42934
t Stat 7.045546068
P-value 0.0021395
Lower 95% 5.10758187
Upper 95% 11.751098 0.0023919
Lower 95.0% 5.10758187
Upper 95.0% 11.751098 0.0023919
RIHP
-0.030227
0.010025319
-3.01503171
0.039355
-0.0580614
-0.0580614
Interpretations of the regressed output of raw material inventory holding period

As per the theory we know that greater is the raw material holding period , lesser is the profit or the ROCE The regressed output also derives the same relationship between the two variables: R square is approximately 70 percent which clearly states that the regressed model is a very good model because it clearly states that 70 percent of the changes in ROCE can be explained by the raw material inventory holding period. Standard error shows that how much is the data scattered which is around 1.025 The x variable is in negative which clearly states that there is an inverse relationship between raw material inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=8.42 0.03 X X here stand for raw material inventory holding period The p value is around 0.039 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.83 which shows the inverse relationship between the ROCE and the raw material inventory holding period FINISHED GOODS HOLDING PERIOD Finished goods holding period is the period for which the finished goods are kept and not sold .the firm always tries to minimise the finished goods holding period
Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.28699 0.0823633
-0.1470459
1.7763793 6
df Regression 1
SS 1.132907
MS 1.132907
F 0.3590235
Residual Total
4 5
12.622093 13.755
3.1555233
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 4.1070897
Upper 95.0%
Intercept
7.5217108
4.1883776
1.7958531 0.5991857
0.1469459
-4.1070897
19.150511
19.150511
FIHP
-0.0711625
0.1187654
0.5813337
-0.400908
0.258583
-0.400908
0.258583
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 8% which clearly states that the regressed model is a not very good model because it clearly states that 92% of the changes in ROCE cannot be explained by the finished goods inventory holding period. Standard error shows that how much is the data scattered which is around 1.77 which is essential in plotting the graph because the variation is very less. The x variable is in negative which clearly states that there is an inverse relationship between finished inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=7.520.07X X here stand for coefficient of finished goods inventory holding period The p value is around 0.58 which shows that the value of the slope is not very significant. The lesser the p value the more significant is the slope but here p-value is more than 0.5 which shows irrelevancy. Correlation is coming out to be negative 0.28 which shows the inverse relationship between the ROCE and finished goods inventory holding period Average collection period : As per the theory we know that a firma always tries to minimise its average collection period because the lesser is the average collection period , more quickly is the cash generated in the business . Our analysis shows that :
Regression Statistics Multiple R 0.1647277
R Square Adjusted Square R
0.0271352
-0.216081 1.8290541 6
Standard Error Observations
SS 0.3732448 13.381755 13.755
MS 0.3732448 3.3454388
F 0.1115683
Coefficients Intercept ACP 6.1772802 -0.0276069
Standard Error 3.4565238 0.0826507
t Stat 1.7871366 -0.3340183
P-value 0.1484448 0.7551435
Lower 95% -3.4195684 -0.2570821
Upper 95% 15.774129 0.2018684
Lower 95.0% -3.4195684 -0.2570821
Upper 95.0% 15.774129 0.2018684
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 2.7 percent which clearly states that the regressed model is a not good model because it clearly states that 97.3 percent of the changes in ROCE cannot be explained by the average collection period. Standard error shows that how much is the data scattered which is around 1.82 which means that around 1.82 percent of the data is scattered. The x variable is in negative which clearly states that there is an inverse relationship between average collection period and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=6.177 0.027X X here stand for coefficient of average collection period The p value is around 0.755 which shows that the value of the slope is not significant. The lesser the p value the more significant is the slope. Correlation is coming out to be negative 0.164 which shows the inverse relationship between the ROCE and finished goods inventory holding period
Average payment period : The average payment period refers to the time which is taken by a company in order to pay off its creditors in a working capital cycle, the average payment period should always be prolonged , however, care should be taken that it does not effect the business at large . Our analysis:
Regression Statistics Multiple R R Square Adjusted Square R 0.7176738 0.8812941 6 0.8798517 0.774139
SS 10.648283 3.1067174 13.755
MS 10.648283 0.7766794
F 13.710011
Coefficients Intercept APP 14.302035 -0.086589
Standard Error 2.5244941 0.0233853
t Stat 5.6653074 -3.7027032
P-value 0.0047867 0.0207862
Lower 95% 7.2929157 -0.1515171
Upper 95% 21.311154 -0.0216609
Lower 95.0% 7.2929157 -0.1515171
Upper 95.0% 21.311154 -0.0216609
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 77 percent which clearly states that the regressed model is a good model which clearly states that 77 percent of the changes in ROCE can be explained by the average payment period Standard error shows that how much is the data scattered which is around 6.41which means that around 6.41 percent of the data is scattered. The x variable is in negative which clearly states that there is an indirect relationship between average payment period and ROCE because an increase in the value of the average payment period will lead to an decrease in the value of ROCE as the equation here is
Y=14.3 0.086X X here stand for coefficient of average payment period The p value is around 0.02 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.879 which shows the indirect relationship between the ROCE and APP.
Net working capital:

The net working capital refers to CURRENT ASSETS CURRENT LIABILITIES , these are the short term assets and the short term liabilities of the company , higher the liquidity in the company lower is the profit or ROCE Our analysis shows that :
Regression Statistics 0.8398470 58 0.7053430 81 R 0.6316788 51 1.0066039 34 6
Multiple R
R Square Adjusted Square
ANOVA Significance F 0.03641956 9
df
SS
MS 9.701994 08 1.013251 48
F 9.575109 7
Regression
9.701994079
Residual Total
4 5
4.053005921 13.755
Coefficient s 6.9470857 49 working -9.4214E05
Standard Error
t Stat 9.412576 57
P-value 0.000710 11 0.036419 57
Lower 95% 4.89789102 6
Upper 95% 8.9962804 71 -9.6798E06
Lower 95.0%
Upper 95.0% 8.99628047 1 -9.6798E06
Intercept Net capital
0.738064195
4.897891
3.04471E-05
-3.094367
-0.00017874
-0.000179
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 70.5 percent which clearly states that the regressed model is a good model because it clearly states that 70.5 percent of the changes in ROCE can be explained by the change in Net Working Capital Standard error shows that how much is the data scattered which is around 1 which means that around 1 percent of the data is scattered. The x variable is in negative which clearly states that there is an inverse relationship between Net Working Capital and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE but the slope is approximately ~0, which means that the impact is not very large as the equation here is Y=6.94 (9.4 x 10-5X) X here stand for coefficient of Net Working Capital The p value is around 0.03 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.839 which shows the inverse relationship between the ROCE and Net Working Capital
ESSAR STEEL INDIA
Current ratio: Current ratio is defined as the total liquidity of the firm. The ideal current ratio is 2 :1 which means that ideally the current assets should be more , should be twice than that of current liabilities as the ratio states that current ratio = current assets /current liabilities higher the liquidity of the firm lower is the risk ,lower is the profit.
Regression Statistics Multiple R R Square Adjusted Square R -0.1983819 4.4546163 6 0.2032105 0.0412945
SS 3.4189085 79.374425 82.793333
MS 3.4189085 19.843606
F 0.1722927
Coefficients Intercept Current ratio (times) 3.4926128
t Stat 0.3137006
P-value 0.7694267
Lower 95% -27.419182
Upper 95% 34.404408
Lower 95.0% -27.419182
Upper 95.0% 34.404408
-7.3477509
17.701945
-0.4150816
0.69938
-56.496229
41.800728
-56.496229
41.800728
Interpretations of the regressed output : R square is roughly 9 percent which shows that the regressed model is not relevant because that means that 9 percent of the variation in ROCE IS explained by current ratio Standard error basically shows that how much is the data dispersed which is around 6.225 The x variable is in negative which clearly states that there is an inverse relationship between current ratio and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is
Y=44.21845--17.95660X X here stand for current ratio The p value is around 0.5 which shows that the value of the slope is significant. Correlation is coming out to be negative between the ROCE and the current ratio 0.03 which shows the inverse relationship
This can also be studied by the scattered diagram above here we study the trend line between ROCE and current ratio the trend line is moving downwards which clearly states that with the increase in the current ratio the ROCE decreases.
Raw material inventory holding period :

Raw material inventory holding period is the time taken to convert the raw materials into work in progress; it is not advisable for the firm to show a higher raw material inventory holding period as it increases the time for the complete manufacture Our analysis shows :
SS 74.565124 8.2282097 82.793333
MS 74.565124 2.0570524
F 36.248528
Coefficients Intercept RIHP -20.821824 0.2493289
Standard Error 3.3330534 0.0414121
t Stat -6.247072 6.0206751
P-value 0.0033471 0.0038339
Lower 95% -30.075864 0.1343504
Upper 95% -11.567785 0.3643073
Lower 95.0% -30.075864 0.1343504
Upper 95.0% -11.567785 0.3643073

As per the theory we know that greater is the raw material holding period , lesser is the profit or the ROCE The regressed output also derives the same relationship between the two variables: R square is roughly 75 percent which clearly states that the regressed model is a very good model because it clearly states that 75 percent of the changes in ROCE can be explained by the raw material inventory holding period. Standard error shows that how much is the data scattered which is around 4.306 The x variable is in negative which clearly states that there is an inverse relationship between raw material inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=55.1200.519X X here stand for raw material inventory holding period The p value is around 0.085 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.75 which shows the inverse relationship between the ROCE and the raw material inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and raw material inventory holding period, the trend line is moving downwards which clearly states that with the increase in the the raw material inventory holding period the ROCE decreases. FINISHED GOODS HOLDING PERIOD Finished goods holding period is the period for which the finished goods are kept and not sold .the firm always tries to minimise the finished goods holding period
ANOVA
SS 0.0132716 82.780062 82.793333
MS 0.0132716 20.695015
F 0.0006413
Significance F 0.9810097
Coefficients Intercept FIHP -1.3170378 0.0089472
Standard Error 10.059712 0.35331
t Stat -0.130922 0.0253238
P-value 0.9021576 0.9810097
Lower 95% -29.247275 -0.9719986
Upper 95% 26.6132 0.9898929
Lower 95.0% -29.247275 -0.9719986
Upper 95.0% 26.6132 0.9898929
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 85 percent which clearly states that the regressed model is a very good model because it clearly states that 85 percent of the changes in ROCE can be explained by the finished goods inventory holding period. Standard error shows that how much is the data scattered which is around 2.517 which is essential in plotting the graph because the variation is very less. The x variable is in negative which clearly states that there is an inverse relationship between finished inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=72.462671.60424X X here stand for coefficient of finished goods inventory holding period The p value is around 0.008 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.992 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and finished goods inventory holding period, the trend line is moving downwards which clearly states that with the increase in the the finished goods inventory holding period the ROCE decreases. Average collection period :
As per the theory we know that a firm always tries to minimise its average collection period because the lesser is the average collection period , more quickly is the cash generated in the business . Our analysis shows that :
SS 1.1902113 81.603122 82.793333
MS 1.1902113 20.400781
F 0.0583415
Coefficients Intercept ACP 3.4650287 -0.3420147
Standard Error 18.85209 1.4159769
t Stat 0.1838008 -0.2415398
P-value 0.8631111 0.8210138
Lower 95% -48.876765 -4.273397
Upper 95% 55.806823 3.5893675
Lower 95.0% -48.876765 -4.273397
Upper 95.0% 55.806823 3.5893675
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 41 percent which clearly states that the regressed model is a good model because it clearly states that 41 percent of the changes in ROCE can be explained by the average collection period Standard error shows that how much is the data scattered which is around 5 which means that around 5 percent of the data is scattered. The x variable is in negative which clearly states that there is an inverse relationship between average collection period and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=63.2601.959X
X here stand for coefficient of average collection period The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.64271 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and AVERAGE COLLECTION PERIOD, the trend line is moving downwards which clearly states that with the increase in the average collection period the ROCE decreases.
SS 46.287139 36.506194 82.793333
MS 46.287139 9.1265485
F 5.0717025
Coefficients Intercept APP 16.269365 -0.1321848
Standard Error 7.7960827 0.0586955
t Stat 2.0868641 -2.2520441
P-value 0.105203 0.087447
Lower 95% -5.3760303 -0.2951495
Upper 95% 37.914761 0.03078
Lower 95.0% -5.3760303 -0.2951495
Upper 95.0% 37.914761 0.03078
INTERPRETATIONS OF THE REGRESSED OUTPUT:
R square is 3 percent which clearly states that the regressed model is a model be which clearly states that 3 percent of the changes in ROCE can be explained by the average payment period Standard error shows that how much is the data scattered which is around 6.41which means that around 6.5 percent of the data is scattered.
The x variable is in positive which clearly states that there is an direct relationship between average payment period and ROCE because an increase in the value of the average payment period will lead to an increase in the value of ROCE as the equation here is Y=13.56+0.283X X here stand for coefficient of average payment period The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be positive 0.188 which shows the direct relationship between the ROCE and APP This can also be studied by the scattered diagram above here we study the trend line between ROCE and AVERAGE PAYMENT PERIOD, the trend line is moving UPWARDS which clearly states that with the increase in the average payment period the ROCE increases

Regression Statistics Multiple R R Square 0.8311292 0.6907758
Adjusted Square
R 0.6134697 2.5299064 6
SS 57.191628 25.601706 82.793333
MS 57.191628 6.4004264
F 8.9355965
Coefficients Intercept Net working capital -2.4868823
t Stat -2.1874884
P-value 0.0939552
Lower 95% -5.6433299
Upper 95% 0.6695652
Lower 95.0% -5.6433299
Upper 95.0% 0.6695652
0.0002459
8.225E-05
2.9892468
0.0403681
1.75E-05
0.0004742
1.75E-05
0.0004742
R square is 41 percent which clearly states that the regressed model is a good model because it clearly states that 41 percent of the changes in ROCE can be explained by the change in Net Working Capital Standard error shows that how much is the data scattered which is around 5 which means that around 5 percent of the data is scattered.
The x variable is in negative which clearly states that there is an inverse relationship between Net Working Capital and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=63.2601.959X X here stand for coefficient of Net Working Capital The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.64271 which shows the inverse relationship between the ROCE and Net Working Capital This can also be studied by the scattered diagram above here we study the trend line between ROCE and Net Working Capital,
the trend line is moving downwards which clearly states that with the increase in the Net
Working Capital the ROCE decreases.
JSW STEEL INDIA
Current ratio:
Current ratio is defined as the total liquidity of the firm. The ideal current ratio is 2 :1 which means that ideally the current assets should be more , should be twice than that of current liabilities as the ratio states that current ratio = current assets /current liabilities higher the liquidity of the firm lower is the risk ,lower is the profit.
Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.0285401 0.0008145 -0.2489818
4.539488 6
ANOVA df Regression Residual Total 1 4 5 SS 0.0671951 82.427805 82.495 MS 0.0671951 20.606951 F 0.0032608 Significance F 0.9572015
Coefficients
t Stat
P-value
Lower 95%
Upper 95% 27.952554
Lower 95.0% 12.253184 35.061117
Upper 95.0% 27.952554
Intercept
7.8496847
1.0841347
0.3392809
-12.253184
Current ratio (times)
-0.7065729
12.373572
0.0571034
0.9572015
-35.061117
33.647971
33.647971
Interpretations of the regressed output :
R square is roughly 9 percent which shows that the regressed model is not relevant because that means that 9 percent of the variation in ROCE IS explained by current ratio Standard error basically shows that how much is the data dispersed which is around 6.225 The x variable is in negative which clearly states that there is an inverse relationship between current ratio and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=44.21845--17.95660X X here stand for current ratio The p value is around 0.5 which shows that the value of the slope is significant. Correlation is coming out to be negative between the ROCE and the current ratio 0.03 which shows the inverse relationship

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.8022975 0.6436812 0.5546016
2.7108355 6
ANOVA df Regression 1 SS 53.100484 MS 53.100484 F 7.2259036 Significance F 0.0547657
Residual Total
4 5
29.394516 82.495
7.348629
Coefficients
t Stat
P-value
Lower 95%
Upper 95% 9.1022311
Lower 95.0% 88.883118 0.0339443
Upper 95.0% 9.1022311
Intercept
-39.890443
-2.260616
0.0866214
-88.883118
RIHP
1.0328824
0.384242
2.6881041
0.0547657
-0.0339443
2.0997091
2.0997091

4.5006274 6
Coefficients
t Stat
P-value
Lower 95%
Upper 95% 24.631902
Lower 95.0% 6.8407221 0.9828734
Upper 95.0% 24.631902
Intercept
8.8955898
1.5694984 0.2696136
0.1916157
-6.8407221
FIHP
-0.0869964
0.3226705
0.8007947
-0.9828734
0.8088806
0.8088806
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 85 percent which clearly states that the regressed model is a very good model because it clearly states that 85 percent of the changes in ROCE can be explained by the finished goods inventory holding period. Standard error shows that how much is the data scattered which is around 2.517 which is essential in plotting the graph because the variation is very less. The x variable is in negative which clearly states that there is an inverse relationship between finished inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=72.462671.60424X X here stand for coefficient of finished goods inventory holding period
The p value is around 0.008 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.992 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and finished goods inventory holding period, the trend line is moving downwards which clearly states that with the increase in the the finished goods inventory holding period the ROCE decreases. Average collection period : As per the theory we know that a firm always tries to minimise its average collection period because the lesser is the average collection period , more quickly is the cash generated in the business . Our analysis shows that :
4.0665631 6
Coefficients
t Stat
P-value
Lower 95%
Upper 95% 43.25986
Lower 95.0% 9.6885604 3.2089585
Upper 95.0% 43.25986
Intercept
16.78565
1.7603711 0.9942485
0.1531505
-9.6885604
ACP
-0.8461314
0.8510261
0.3763773
-3.2089585
1.5166957
1.5166957
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 41 percent which clearly states that the regressed model is a good model because it clearly states that 41 percent of the changes in ROCE can be explained by the average collection period Standard error shows that how much is the data scattered which is around 5 which means that around 5 percent of the data is scattered. The x variable is in negative which clearly states that there is an inverse relationship between average collection period and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=63.2601.959X X here stand for coefficient of average collection period The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.64271 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and AVERAGE COLLECTION PERIOD, the trend line is moving downwards which clearly states that with the increase in the average collection period the ROCE decreases.
Regression Statistics Multiple R 0.4447957
R Square Adjusted R Square Standard Error Observations
0.1978432 -0.0026959
4.0673678 6
Coefficients
t Stat
P-value
Lower 95%
Upper 95% 51.380918
Lower 95.0% 13.504238 0.3018461
Upper 95.0% 51.380918
Intercept
18.93834
1.6207486 0.9932555
0.1803879
-13.504238
APP
-0.0795316
0.0800716
0.3768063
-0.3018461
0.1427829
0.1427829
The x variable is in positive which clearly states that there is an direct relationship between average payment period and ROCE because an increase in the value of the average payment period will lead to an increase in the value of ROCE as the equation here is Y=13.56+0.283X X here stand for coefficient of average payment period The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be positive 0.188 which shows the direct relationship between the ROCE and APP
This can also be studied by the scattered diagram above here we study the trend line between ROCE and AVERAGE PAYMENT PERIOD, the trend line is moving UPWARDS which clearly states that with the increase in the average payment period the ROCE increases

Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.6129668 0.3757283 0.2196604
3.5881504 6
Coefficients Intercept Net working capital 13.0833
t Stat 3.3418283
P-value 0.0287868
Lower 95% 2.2134822
Upper 95% 23.953118
Lower 95.0% 2.2134822 0.0001229
Upper 95.0% 23.953118
0.0001557
0.0001004
1.5516013
0.1957043
-0.0001229
0.0004344
0.0004344
The x variable is in negative which clearly states that there is an inverse relationship between Net Working Capital and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=63.2601.959X X here stand for coefficient of Net Working Capital The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.64271 which shows the inverse relationship between the ROCE and Net Working Capital This can also be studied by the scattered diagram above here we study the trend line between ROCE and Net Working Capital, the trend line is moving downwards which clearly states that with the increase in the Net
SAIL: STEEL AUTHORITY OF INDIA
Current ratio:
0.5465679
7.0185652 6
SS 346.1523 197.04103 543.19333
MS 346.1523 49.260258
F 7.0270096
Coefficients
Standard Error
t Stat 2.0839635
P-value
Lower 95%
Upper 95%
Lower 95.0% 127.59961 2.0229484
Upper 95.0%
Intercept Current ratio (times)
-54.709995
26.252856
0.1055486
-127.59961
18.179619
18.179619
42.697251
16.106999
2.6508507
0.0569312
-2.0229484
87.41745
87.41745

-0.0374336
10.61628 6
df Regression Residual 1 4
SS 92.371709 450.82162
MS 92.371709 112.70541
F 0.8195854
Total
543.19333
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 56.589643 1.6775596
Upper 95.0%
Intercept
48.511375
37.854528
1.2815211 0.9053096
0.2692551
-56.589643
153.61239
153.61239
RIHP
-0.4124965
0.4556413
0.4165004
-1.6775596
0.8525667
0.8525667

Regression Statistics
Multiple R R Square Adjusted R Square Standard Error Observations
0.5410124 0.2926944
0.115868
9.8005572 6
SS 158.98965 384.20369 543.19333
MS 158.98965 96.050922
F 1.6552641
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 40.153862 2.4311658
Upper 95.0%
Intercept
61.106059
36.471069
1.6754666 1.2865707
0.1691523
-40.153862
162.36598
162.36598
FIHP
-0.7698387
0.5983648
0.2676571
-2.4311658
0.8914885
0.8914885
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 85 percent which clearly states that the regressed model is a very good model because it clearly states that 85 percent of the changes in ROCE can be explained by the finished goods inventory holding period. Standard error shows that how much is the data scattered which is around 2.517 which is essential in plotting the graph because the variation is very less. The x variable is in negative which clearly states that there is an inverse relationship between finished inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=72.462671.60424X X here stand for coefficient of finished goods inventory holding period The p value is around 0.008 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope
Correlation is coming out to be negative 0.992 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and finished goods inventory holding period, the trend line is moving downwards which clearly states that with the increase in the the finished goods inventory holding period the ROCE decreases. Average collection period : As per the theory we know that a firm always tries to minimise its average collection period because the lesser is the average collection period , more quickly is the cash generated in the business . Our analysis shows that :
0.8690023
3.7724552 6
SS 486.26766 56.925672 543.19333
MS 486.26766 14.231418
F 34.168602
t Stat 7.0631498 5.8453915
P-value 0.0021195
Lower 95% 48.770147
Upper 95% 111.94578 1.1367219
Lower 95.0% 48.770147 3.1934838
Upper 95.0% 111.94578 1.1367219
ACP
-2.1651028
0.3703948
0.0042715
-3.1934838
R square is 41 percent which clearly states that the regressed model is a good model because it clearly states that 41 percent of the changes in ROCE can be explained by the average collection period Standard error shows that how much is the data scattered which is around 5 which means that around 5 percent of the data is scattered. The x variable is in negative which clearly states that there is an inverse relationship between average collection period and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=63.2601.959X X here stand for coefficient of average collection period The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.64271 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and AVERAGE COLLECTION PERIOD, the trend line is moving downwards which clearly states that with the increase in the average collection period the ROCE decreases.
Regression Statistics Multiple R R Square Adjusted R Square 0.8018099 0.6428991
0.5536239 6.9637419
Standard
Error Observations 6
SS 349.21853 193.97481 543.19333
MS 349.21853 48.493702
F 7.2013171
t Stat 3.6162692
P-value 0.0224313
Lower 95% 12.355521
Upper 95% 94.049829
Lower 95.0% 12.355521 0.9833221
Upper 95.0% 94.049829
APP
-0.4832939
0.1800965
-2.683527
0.0550266
-0.9833221
0.0167342
0.0167342

0.1136725
9.8127181 6
SS 158.03559 385.15774 543.19333
MS 158.03559 96.289436
F 1.6412557
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 12.600415
Upper 95.0%
Intercept Net working capital
36.56418
17.70775
2.0648688
0.1078555
-12.600415
85.728776
85.728776
-0.0001914
0.0001494
-1.281115
0.269384
-0.0006061
0.0002233
0.0006061
0.0002233
TATA STEEL INDIA
Current ratio:
0.134565
2.3168956 6
SS 9.5413133 21.47202 31.013333
MS 9.5413133 5.368005
F 1.7774412
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 0.6243844 45.227424
Upper 95.0%
Intercept Current ratio (times)
18.622102
6.9320608
2.6863731 1.3332071
0.0548642
-0.6243844
37.868588
37.868588
-14.672172
11.005171
0.253326
-45.227424
15.88308
15.88308

-0.195363
2.7229466 6
df Regression Residual 1 4
SS 1.3555816 29.657752
MS 1.3555816 7.4144379
F 0.18283
Total
31.013333
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 48.817593 0.4306061
Upper 95.0%
Intercept
1.7010758
18.19545
0.0934891
0.9300106
-48.817593
52.219745
52.219745
RIHP
0.0783875
0.1833257
0.4275862
0.6909664
-0.4306061
0.5873811
0.5873811

Regression Statistics
Multiple R R Square Adjusted R Square Standard Error Observations
0.8726141 0.7614554
0.7018192
1.3599691 6
SS 23.615269 7.3980641 31.013333
MS 23.615269 1.849516
F 12.768351
Coefficients
Standard Error
t Stat 1.5719147 3.5732829
P-value
Lower 95%
Upper 95%
Lower 95.0% 20.818936 0.1111242
Upper 95.0%
Intercept FIHP
-7.5259621 0.4983176
4.7877676 0.1394565
0.1910704 0.0233072
-20.818936 0.1111242
5.7670119 0.8855109
5.7670119 0.8855109
INTERPRETATIONS OF THE REGRESSED OUTPUT: R square is 85 percent which clearly states that the regressed model is a very good model because it clearly states that 85 percent of the changes in ROCE can be explained by the finished goods inventory holding period. Standard error shows that how much is the data scattered which is around 2.517 which is essential in plotting the graph because the variation is very less. The x variable is in negative which clearly states that there is an inverse relationship between finished inventory holding period and ROCE because an increase in the value of the current ratio will lead to a decline in the value of ROCE as the equation here is Y=72.462671.60424X X here stand for coefficient of finished goods inventory holding period The p value is around 0.008 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope
Correlation is coming out to be negative 0.992 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and finished goods inventory holding period, the trend line is moving downwards which clearly states that with the increase in the the finished goods inventory holding period the ROCE decreases. Average collection period : As per the theory we know that a firm always tries to minimise its average collection period because the lesser is the average collection period , more quickly is the cash generated in the business . Our analysis shows that :
0.1811589
2.2536633 6
SS 10.69734 20.315994 31.013333
MS 10.69734 5.0789985
F 2.1061907
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0% 8.8399161 0.7185774
Upper 95.0%
Intercept
3.2759552
4.3638073
0.7507103
0.4945761
-8.8399161
15.391827
15.391827
ACP
0.7869548
0.5422518
1.4512721
0.2203313
-0.7185774
2.2924871
2.2924871
R square is 41 percent which clearly states that the regressed model is a good model because it clearly states that 41 percent of the changes in ROCE can be explained by the average collection period Standard error shows that how much is the data scattered which is around 5 which means that around 5 percent of the data is scattered. The x variable is in negative which clearly states that there is an inverse relationship between average collection period and ROCE because an increase in the value of the average collection period will lead to a decline in the value of ROCE as the equation here is Y=63.2601.959X X here stand for coefficient of average collection period The p value is around 0.004 which shows that the value of the slope is significant. The lesser the p value the more significant is the slope Correlation is coming out to be negative 0.64271 which shows the inverse relationship between the ROCE and finished goods inventory holding period This can also be studied by the scattered diagram above here we study the trend line between ROCE and AVERAGE COLLECTION PERIOD, the trend line is moving downwards which clearly states that with the increase in the average collection period the ROCE decreases.
Regression Statistics Multiple R R Square Adjusted R Square 0.8157587 0.6654623
0.5818279 1.6105223
Standard
Error Observations 6
SS 20.638205 10.375128 31.013333
MS 20.638205 2.593782
F 7.9568002
t Stat 4.4533481 2.8207801
P-value 0.0112177
Lower 95% 9.6141541
Upper 95% 41.450427
Lower 95.0% 9.6141541 0.2980714
Upper 95.0% 41.450427
APP
-0.1502162
0.0532534
0.0477902
-0.2980714
-0.002361
-0.002361

Regression Statistics Multiple R R Square Adjusted Square Standard Error Observations R 0.5594042 0.8046884 0.6475234
1.6531391 6
SS 20.081858 10.931476 31.013333
MS 20.081858 2.7328689
F 7.3482697
Coefficients Intercept Net working capital 2.1566698
t Stat 0.7758306
P-value 0.4811652
Lower 95% -5.561349
Upper 95% 9.8746886
Lower 95.0% -5.561349
Upper 95.0% 9.8746886
0.0003635
0.0001341
2.7107692
0.0534947
-8.808E-06
0.0007359
-8.808E06
0.0007359

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BHUSHAN STEEL

Interpretations of the regressed output

ANOVA Significance F 0.343313

df Regression Residual Total 1 4 5

SS 3.07850161 10.6764984 13.755

Coefficients Intercept Current (times) ratio 2.872138457 1.753263741

Standard Error 3.14134405

Lower 95% -6.968506

Upper 95% 10.4750331

Lower 95.0% -6.968505583

Upper 95.0% 10.475033

ANOVA Significance F 0.03935502

df Regression Residual Total 1 4 5

SS 9.55192508 4.20307492 13.755

Coefficients Intercept 8.42934

Standard Error 1.196406906

Lower 95% 5.10758187

Upper 95% 11.751098 0.0023919

Lower 95.0% 5.10758187

Upper 95.0% 11.751098 0.0023919

Interpretations of the regressed output of raw material inventory holding period

ANOVA Significance F 0.5813337

Lower 95.0% 4.1070897

R Square Adjusted Square R

Standard Error Observations

ANOVA Significance F 0.7551435

df Regression Residual Total 1 4 5

SS 0.3732448 13.381755 13.755

Coefficients Intercept ACP 6.1772802 -0.0276069

Standard Error 3.4565238 0.0826507

t Stat 1.7871366 -0.3340183

P-value 0.1484448 0.7551435

Lower 95% -3.4195684 -0.2570821

Upper 95% 15.774129 0.2018684

Lower 95.0% -3.4195684 -0.2570821

Upper 95.0% 15.774129 0.2018684

Standard Error Observations

ANOVA Significance F 0.0207862

df Regression Residual Total 1 4 5

SS 10.648283 3.1067174 13.755

Coefficients Intercept APP 14.302035 -0.086589

Standard Error 2.5244941 0.0233853

t Stat 5.6653074 -3.7027032

P-value 0.0047867 0.0207862

Lower 95% 7.2929157 -0.1515171

Upper 95% 21.311154 -0.0216609

Lower 95.0% 7.2929157 -0.1515171

Upper 95.0% 21.311154 -0.0216609

Net working capital:

Regression Statistics 0.8398470 58 0.7053430 81 R 0.6316788 51 1.0066039 34 6

R Square Adjusted Square

Standard Error Observations

ANOVA Significance F 0.03641956 9

Coefficient s 6.9470857 49 working -9.4214E05

P-value 0.000710 11 0.036419 57

Lower 95% 4.89789102 6

Upper 95% 8.9962804 71 -9.6798E06

Upper 95.0% 8.99628047 1 -9.6798E06

Intercept Net capital

ESSAR STEEL INDIA

Standard Error Observations

ANOVA Significance F 0.69938