QUANTITIVE METHODS OF BUSINESS

NARSEE MONJEE COLLEGE OF COMMERCE AND ECONOMICS

CLASS: F.Y.B.M.S DIV: B DATE OF SUBMISSION: 8/9/2008

NAME OF STUDENTS:

NAMES
VISHAL GALA YASMIN KHAN NIVEDITA NATHAN NIRALI SHAH ESHA SINGH RESHMA LALA

ROLL NUMBERS
69 77 86 100 107 115

ACKNOWLEDGEMENT
We would like to put forward our deep gratitude towards our QMB professor Mrs. Kinjal for giving us such a topic that helped us to grasp the topic better. It also helped us to understand its practical applications. This entire process gave us beyond text book knowledge and hence was an enriching process. It helped us know how a group co-ordinates while making a project. Lastly we would like to acknowledge the authors and editors of various newspapers, books and websites which we used for our reference work.

INDEX
1. Introduction of project 2. Collection of data Names of 50 financial companies with their approximate share capital and market capitalization 3. Application of data a) Introduction to statistics and presentation data Numerical representation of data Graphical representation of data b) Measures of central tendency Mean Median o Quartile o Deciles o Percentile Mode c) Measures of dispersion Range and coefficient of range Inter quartile range Quartile deviation and coefficient of quartile deviation Mean deviation and coefficient of mean deviation Variance and standard deviation Combined mean and combined standard deviation d) Correlation Spearmans rank correlation coefficient Karl Pearsons coefficient of correlation e) Regression 4. Bibliography

INTRODUCTION
Statistics is defined as the science of collecting data, classifying it in similar groups measuring the data quantitatively with different parameters, analyzing the measures and estimating the future to facilitate in proper long term or short term planning. Statistics is very useful in business. It is the core of business activity. Survey of the market, measuring the production, comparison of different products, analysis of the previous data, quality control, estimation for the future, planning the policies, taking decisions in situations involving uncertainty, are those aspects where statistics plays a very important role In this project, we have collected the share capital and market capitalizations of 50 various companies. SHARE CAPITAL: Share capital is the fund raised by a company through the issuance of common or preferential shares to individuals/ institutions/ investors for the growth and expansion aspect of the company. MARKET CAPITALIZATION: It is a measurement corporate or economy size equal to the share price times the economy of shares outstanding of a public company.

1. INTRODUCTION TO STATISTICS AND PRESENTATION OF DATA

The data given below is a list of 50 financial companies having their share capital and market capitalization values. From this data, we have prepared; 1) 2) 3) 4) 5) 6) 7) Frequency distribution table for each. Cumulative Frequency distribution table Relative Frequency distribution table Percentage Frequency distribution table Bivariate Frequency distribution table Marginal Frequency distribution table Conditional Frequency distribution table

From the Frequency distribution table prepared for each; share capital and market capitalization, we have also found; i. ii. iii. iv. The upper limits and the lower limits of the class intervals Highest and the lowest values for the data Class mark or each intervals Class width

SR. NO
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

NAME OF COMPANY
Bank of India State Bank of India HDFC Bank HDFC Reliance Capital ICICI Bank Indiabulls Financial Services IFCI Yes Bank IDBI Bank Bajaj Auto Finance Punjab National Bank Bank of Baroda Kotak Mahindra Bank Axis Bank Allahabad Bank Federal Bank Oriental Bank of Commerce Vijaya Bank UCO Bank Dena Bank Motilal Oswal Financial services Karnataka Bank Bank of Rajasthan Geojit Financial Services Union Bank of India Central Bank of India Centurion Bank of Punjab Canara Bank Development Credit Bank IDFC Shriram Transport Finance Edelweiss Capital India Infolines Power Finance Corporation Bank Of Maharashtra City Union Bank Corporation Bank Future Capital Holdings Ing Vysya Bank Karrur Vysya Bank JM Financial IL&FS Investsmart Prime Securities Syndicate Bank Sundaram Finance Religare Enterprise J&K Bank Bajaj Finserv Bajaj Holdings

SHARE CAPITAL. (IN CRS) 526 631 354 284 246 1463 384 1068 280 725 37 315 366 345 358 447 171 251 434 799 287 14 121 134 21 505 1204 157 410 174 1294 203 38 57 1148 431 32 143 63 102 54 30 70 12 522 28 64 48 72 101

MARKET CAPITALIZATION. (IN 100 CRS) 153 966 544 714 348 811 79 38 41 67 5 158 104 220 264 29 38 43 17 30 14 15 17 12 10 76 26 79 89 10 133 69 47 46 166 15 10 41 23 24 18 39 12 1 31 17 29 25 77 46

SHARE CAPITAL
1.

FREQUENCY DISTRIBUTION TABLE FOR SHARE CAPITAL.

TALLY MARKS FREQUENCY 29 13 3 2 3 50 CLASS MARK 150 450 750 1050 1350

CLASS INTERVALS 0 300 300 600 600 900 900 1200 1200 1500 TOTAL

LOWER LIMITS: 0, 300, 600, 900, 1200 UPPER LIMITS: 300, 600, 900, 1200, 1500 CLASS WIDTH =Upper Limit Lower Limit =300 0 =300 LOWEST VALUE: 12 HIGHEST VALUE: 1463

CLASS MARK:
2.

CUMULATIVE FREQUENCY DISTRIBUTION TABLE FOR SHARE CAPITAL.

FREQUENCY 29 13 3 2 3 50 LESS THAN CUMULATIVE FREQUENCY 29 42 45 47 50 GREATER THAN CUMULATIVE FREQUENCY 50 21 8 5 3

CLASS INTERVALS 0 300 300 600 600 900 900 1200 1200 1500 TOTAL

3.

RELATIVE AND PERCENTAGE FREQUENCY DISTRIBUTION TABLE FOR SHARE CAPITAL.

CLASS INTERVALS 0 300 300 600 600 900 900 1200 1200 1500 TOTAL FREQUENCY 29 13 3 2 3 50 RELATIVE FREQUENCY 0.58 0.26 0.06 0.04 0.06 PERCENTAGE FREQUENCY 58% 26% 6% 4% 6%

RELATIVE FREQUENCY =

PERCENTAGE FREQUENCY =

MARKET CAPITALIZATION
1.

FREQUENCY DISTRIBUTION TABLE FOR SHARE CAPITAL.

TALLY MARKS FREQUENCY 43 3 1 1 2 50 CLASS MARK 100 300 500 700 900

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL

LOWER LIMITS: 0, 200, 400, 600, 800 UPPER LIMITS: 200, 400, 600, 800, 1000 CLASS WIDTH =Upper Limit Lower Limit =200 0 =200 LOWEST VALUE: 1 HIGHEST VALUE: 966

CLASS MARK:

2.

CUMULATIVE FREQUENCY DISTRIBUTION TABLE FOR SHARE CAPITAL.

FREQUENCY 43 3 1 1 2 50 LESS THAN CUMULATIVE FREQUENCY 43 46 47 48 50 GREATER THAN CUMULATIVE FREQUENCY 50 7 4 3 2

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL

3.

RELATIVE AND PERCENTAGE FREQUENCY DISTRIBUTION TABLE FOR SHARE CAPITAL.

FREQUENCY 43 3 1 1 2 50

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL

RELATIVE FREQUENCY 0.86 0.06 0.02 0.02 0.04

PERCENTAGE FREQUENCY 86 6 2 2 4

RELATIVE FREQUENCY =

PERCENTAGE FREQUENCY =

BIVARIATE FREQUENCY DISTRIBUTION TABLE

SHARE CAPITAL MARKET CAPITALIZATION

0 300

300 600

600 900

900 1200

1200 1500

TOTAL

0 200

200 400

27 11 1 1 0 1 1 0 0 0

2 0 0 0 1

2 0 0 0 0

2 0 0 0 1

44 2 1 1 2

400 600

600 800

800 1000

TOTAL

29

13

50

MARGINAL FREQUENCY DISTRIBUTION TABLE

MARGINAL FREQUENCY FOR SHARE CAPITAL 0 300 300 600 600 900 900 1200 1200 1500 TOTAL

FREQUENCY
29 13 3 2 3 50

MARGINAL FREQUENCY FOR MARKET CAPITALIZATION 0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY
44 2 1 1 2 50

CONDITIONAL FREQUENCY DISTRIBUTION TABLE:

a. Considering share capital whose market capitalization is less than 400 crs. b. Considering market capitalization whose share capital is more than 900 crs.

CONDITIONAL FREQUENCY FOR SHARE CAPITAL 0 300 300 600 600 900 900 1200 1200 1500 TOTAL

FREQUENCY
28 12 2 2 2 46

CONDITIONAL FREQUENCY FOR MARKET CAPITALIZATION 0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY
4 0 0 0 1 5

PRESENTING THE ABOVE DATA IN THE FORM OF:

1) 2) 3) 4) Histogram Frequency curve Frequency polygon Ogive curves

1) HISTOGRAM:
Histogram is a graph on a frequency distribution table where adjacent rectangles are drawn to represent the data. While drawing the histogram, the class intervals are taken on the x-axis and the frequencies are taken on the y-axis.

HISTOGRAM FOR SHARE CAPITAL:

CLASS INTERVALS

FREQUENCY

0 300 300 600 600 900 900 1200 1200 1500 TOTAL

29 13 3 2 3 50

2) FREQUENCY CURVE:
Points which are plotted on a graph where class marks are on x-axis and frequencies are on y-axis and joined by a smooth curve, it forms a frequency curve.

FREQUENCY CURVE FOR SHARE CAPITAL:

CLASS INTERVALS

FREQUENCY

CLASS MARK

0 300 300 600 600 900 900 1200 1200 1500 TOTAL

29 13 3 2 3 50

150 450 750 1050 1350

3) FREQUENCY POLYGON
Points plotted on a graph where class marks are on x-axis and frequencies are on y-axis are joined by a straight lines, it forms a frequency polygon.

FREQUENCY POLYGON FOR MARKET CAPITALTZATION:

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY 43 3 1 1 2 50

CLASS MARK 100 300 500 700 900

4) OGIVE CURVES
Frequency curves in which class limits are plotted instead of class marks and cumulative frequencies are plotted instead of individual frequencies, are called ogive curves. For less than ogive curve, upper class limit is taken and for more than ogive curve, lower class limit is taken.

OGIVE CURVES FOR MARKET CAPITALIZATION:

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL FREQUENCY 43 3 1 1 2 50

LESS THAN CUMULATIVE FREQUENCY 43 46 47 48 50

GREATER THAN CUMULATIVE FREQUENCY 50 7 4 3 2

The median for ogive curves is:

2.

MEASURES OF CENTRAL TENDENCY

MEAN:
Mean is the average of a data. It is the ratio of the total values by the number of values. ARITHMETIC MEAN FOR SHARE CAPITAL:

CLASS INTERVALS 0 300 300 600 600 900 900 1200 1200 1500 TOTAL

FREQUENCY (f) 29 13 3 2 3 N = 50

CLASS MARK (x) 150 450 750 1050 1350

fx 4350 5850 2250 2100 4050 18600

N = 50,

fx = 18600

= =

= 372
Ans: MEAN = 372

 ARITHMETIC MEAN FOR MARKET CAPITALIZATION:

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY (f) 43 3 1 1 2 N = 50

CLASS MARK (x) 100 300 500 700 900

fx 4300 900 500 700 1800 8200

N = 50,

fx = 8200

= =

= 164
Ans: MEAN = 164

MEDIAN:
Median is the central value or the mid-point value of the given data after arranging the values in the ascending or descending order.
MEDIAN (Q2) OF SHARE CAPITAL: (QUARTILES) CLASS INTERVALS 0 300 300 600 600 900 900 1200 1200 1500 TOTAL FREQUENCY 29 13 3 2 3 N = 50 LESS THAN CUMULATIVE FREQUENCY 29 42 45 47 50

1) m =

= 25

Class interval = 0 300

Median (Q2) =
=

= = 258.62
Ans: Q2 = 258.62

2) m =

=
Q1 =
=

= 12.5

Class interval = 0 300

= = 129.31
Ans: Q1 = 129.31

3) m =

= 37.5

Class interval = 300 600

Q3 =
=

= = 300 + 196.15 = 496.15

Ans: Q3 = 496.15

(DECILES) 4TH DECILE: m =

= 20

D4 =
= =

= 206.90 Ans: D4 = 206.90

(PERCENTILES) 30TH PERCENTILE: m =

= 15

P30 =
= =

= 155.17 Ans: P30 = 155.17

 MEDIAN (Q2) OF MARKET CAPITALIZATION: (QUARTILES) CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL FREQUENCY 43 3 1 1 2 50 = 25

LESS THAN CUMULATIVE FREQUENCY 43 46 47 48 50

1) m =

CLASS INTERVAL: 0 - 200

Median (Q2) =
=

=
Ans: Q2 = 116.28

= 116.28

2) m =

=
Q1 =
=

= 12.5

CLASS INTERVAL: 0 - 200

=
Ans: Q1 = 58.14

= 58.14

3) m =

= 37.5

CLASS INTERVAL: 0 - 200

Q3 =
=

= 174.28
Ans: Q3 = 174.28 (DECILES) 4TH DECILE: m =

= 20

D4 =
=

= 93.02 Ans: D4 = 93.02

(PERCENTILES) 30TH PERCENTILE: m =

= 15

P30 =
=

= 69.77 Ans: P30 = 69.77

MODE
The most frequently occurring value of the data is known as mode. MODE FOR SHARE CAPITAL: Here, the maximum frequency is 29, corresponding to the class interval 0 300

The modal class is 0 300

L1 = 0, L2 = 300, f = 29, f0 = 0, f2 = 13

Mode (z) =
=
=

= 193.33 Ans: mode for share capital = 193.33

MODE FOR MARKET CAPITALIZATION: Here, the maximum frequency is 43, corresponding to the class interval 0 200

The modal class is 0 200

L1 = 0, L2 = 200, f = 43, f0 = 0, f2 = 3

Mode (z) =
=
=

= 103.61 Ans: mode for share capital = 103.61

3.

MEASURES OF DISPERSION

SHARE CAPITAL
CLASS INTERVALS 0 300 300 600 600 900 900 1200 1200 1500 TOTAL FREQUENCY 29 13 3 2 3 50

1. RANGE AND CO-EFFICIENT FOR RANGE OR SHARE CAPITAL: Range = Upper limit of highest class interval Lowest limit of lowest class interval = 1500 0 = 1500 Co-efficient of Range = = =1

2. INTER QUARTILE RANGE FOR SHARE CAPITAL:

Given: Q1 = 129.31 Q3 = 496.15

Inter quartile range = Q3 Q1 = 496.15 - 129.31 = 366.84

3. QUARTILE DEVIATION AND CO-EFFICIENT OF QUARTILE DEVIATION: Quartile deviation = = = = 183.42 Co-efficient of quartile deviation =

= = = 0.59

4. MEAN DEVIATION AND COEFFICIENT OF MEAN DEVIATION: C.I

0 300 300 600 600 900 900 1200 1200 1500 TOTAL FREQUENCY (F) 29 13 3 2 3 50

C.F
29 42 45 47 50

CLASS MARK (X) 150 450 750

1050 1350

X M 108.27 191.38 491.38 791.38 1091.38

FX M 3149.98 2487.94 1474.14 1582.76 3274.14 11968.96

m = n/4 = 50/2 = 25 Q2 = =

= = 258.62
Mean deviation =

=
= 239.38

Coefficient of mean deviation =

= = 0.93
5. VARIANCE AND STANDARD DEVIATION:
fx2 652500 2632500 1687500 2205000 5467500 12645000

C.I 0 300 300 600 600 900 900 1200 1200 1500 TOTAL

FREQUENCY (F) 29 13 3 2 3 50

CLASS MARK (x) 150 450 750 1050 1350

fx 4350 5850 2250 2100 4050 18600

= =

= 372

S.D ( =

=
= = 338.40

Variance (

= 114516

Co-efficient of variation =

= =

= 90.97

MARKET CAPITALIZATION

CLASS INTERVALS 0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY 43 3 1 1 2 50

1. RANGE AND CO-EFFICIENT OF RANGE FOR SHARE CAPITAL: Range = Upper limit of highest class interval Lowest limit of lowest class interval = 1000 0 = 1000 Co-efficient of Range = = =1

2. INTER QUARTILE RANGE FOR SHARE CAPITAL:

Given: Q1 = 58.14, Q3 = 174.42

Inter quartile range = Q3 Q1 = 174.42 - 58.14 = 116.28

3. QUARTILE DEVIATION AND CO-EFFICIENT OF QUARTILE DEVIATION:

Quartile deviation = = = = 58.14 Co-efficient of quartile deviation =

= = = 0.5

4. MEAN DEVIATION AND COEFFICIENT OF MEAN DEVIATION:

C.I
0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY (F) 43 3 1 1 2 50

C.F
43 46 47 48 50

CLASS MARK (X)

100 300 500 700 900

X M 16.28 183.72 383.72 583.72 783.72

FX M 700.04 551.16 383.72 583.72 1567.44 3786.08

m = n/4 = 50/2 = 25

Q2 = =

= = 116.28
Mean deviation =

=
= 75.72

Coefficient of mean deviation =

= = 0.65
5. VARIANCE AND STANDARD DEVIATION:
fx2 430000 270000 250000 490000 1620000 3060000

C.I 0 200 200 400 400 600 600 800 800 1000 TOTAL

FREQUENCY (F) 43 3 1 1 2 50

CLASS MARK (x) 100 300 500 700 900

fx 4300 900 500 700 1800

= 164

S.D ( =

=
= = 185.21

Variance (

= 185.21

Co-efficient of variation =

= =

= 112.93

COMBINED MEAN AND COMBINED S.D:

OBSERVATIONS (n) MEAN () S.D ( ) SHARE CAPITAL 50 (n1 ) 372 (1) 338.40 ( ) MARKET CAPITALIZATION 50 (n2) 164 (2) 185.21 ( )

Combined mean (12) = =

= = 268 d1 = (1 2) = 372 268 = 104 d2 = (1 12) = 164 268 = 104

Combined S.D =
( )

= = = = 291.63

4.

CORRELATION

SPEARMANS RANK CORRELATION COEFFICIENT:

SHARE CAPITAL (I) 54 30 70 12 522 28 64 48 72 101 Total MARKET CAPITALIZATION (II) 18 39 12 1 31 17 29 25 77 46 RANK I RANK II D (R1-R2) D2

6 8 4 10 1 9 5 7 3 2

7 3 9 10 4 8 5 6 1 2

-1 5 -5 0 -3 1 0 1 2 0

1 25 25 0 9 1 0 1 4 0 66

R=1

=1 = 1 0.4 = 0.6

KARL PEARSONS CO-EFFICIENT OF CORRELATION:

SHARE CAPITAL (x) 5 3 7 10 5 2 6 4 7 1 50

MARKET CAPITALIZATION (y) 10 9 12 15 8 7 12 8 14 5 100

(x )
0 2 2 5 0 3 1 1 2 4

(y)
0 1 2 5 2 3 2 2 4 5

(x )(y)
0 2 4 25 0 9 2 2 8 20 72

(x )2
0 4 4 25 0 9 1 1 4 16 64

(y)2
0 1 4 25 4 9 4 4 16 25 97

Note: The values considered for share capital and market capitalization are the approximate values considered as single units in 100 and 1000 crs respectively

=5

= 10

r=

= = =

= 0.91869

0.92

5.
SHARE CAPITAL (X) MARKET CAPITALIZATION (Y) 24

REGRESSION
X2 Y2 XY

10404 102

576

2448

2916 54 30 70 12 522 28 64 48 72 101 18 900 39 4900 12 144 1 272484 31 784 17 4096 29 2304 25 5184 77 10201 46 314317

324 1521 144 1 961 289 625 841 5929 2116 13327

972 1170 840 12 16182 476 1856 1200 5544 4647 35346

Regression equation for line y on x and x on y:

byx = (

=
)

bxy =

=
)

0.82

(y ) = byx (x ) Y 29 = 0.016 (x 100.27)

Y 29 = 0.016x 1.644472 Y = 0.016x + 27.355 Regression equation of y on x: Y = 0.016x + 27.355 (x ) = bxy(y ) X 100.273 = 0.82(y 29) X 100.273 = 0.82y 23.78 Regression equation of x on y: x = 0.82y + 76.49

Relation between byx and bxy: r= = 0.116254359 0.12

BIBLIOGRAPHY
Books Text Books

 Mandar Bhanushe A. V. Deshpande Reference Books Statistics for management Levin and Rubins Statistics for business and economics Anderson and Sweng Web sites Moneycontrol.com Myiris.com --- ---