In this video, the instructor demonstrates simple regression analysis.
- [Instructor] Let's talk about regression analysis.…You might not be familiar with the term…but a regression analysis is a very powerful business tool…that you can use to make predictions and forecast…for your firm.…In particular, a regression is simply a statistical model.…And it's most basic form or regression is defined by…the equation you see here, y equals ax plus b.…What this is simply saying is that our dependent variable y…is driven by our independent variable x…plus a y intercept b.…
So we might think about this and say…a situation trying to figure out how long it will take…to drive to California from somewhere else in the country.…The time to reach California…is going to be based on two factors,…how fast we're traveling and where we start from.…a is the speed at which we're driving,…x is the number of hours…it will take us to reach California,…and b is where we start from.…It takes longer to reach California…starting from Virginia for example,…than it does if we start from Colorado.…
Similarly, it will take us less time to reach California…
Join Professor Michael McDonald and discover how to use predictive analytics to forecast key performance indicators of interest, such as quarterly sales, projected cash flow, or even optimized product pricing. All you need is Microsoft Excel. Michael uses the built-in formulas, functions, and calculations to perform regression analysis, calculate confidence intervals, and stress test your results. You'll walk away from the course able to immediately begin creating forecasts for your own business needs.
- Understanding big data and predictive analytics
- Gathering financial data
- Cleaning up your data
- Calculating key financial metrics
- Using regression analysis for business-specific forecasts
- Performing scenario analysis
- Calculating confidence intervals
- Stress testing