Application of the Method of Mathematical Regression to Financial Status Analysis

• Main Author: Q.Y. Tian
• Format: Article
• Language: English
• Published: AIDIC Servizi S.r.l. 2016-08-01
• Series: Chemical Engineering Transactions
• Online Access: https://www.cetjournal.it/index.php/cet/article/view/3982

As a commonly-used method of mathematical and statistical analysis, regression analysis is based on existing observation data to establish reasonable dependent relations between two or more variables. It aims to discover hidden rules from the data, with which the company can make further predications, decision-makings and control. Currently, as domestic and global economic situations are improving and developing constantly, the validity and reliability of a company’s financial data is of great importance for its managers, existing investors, and potential investors as well, which directly influence the company’s investment directions and development directions. On the basis of a certain company’s financial data, the paper used the method of mathematic regression to analyze the component indicators of the company’s operating power, earning power, solvency, and capacity development. This helped acquire knowledge of overall conditions of operation and earnings in the company, which would serve for forecasting the company’s future development directions.