Financial Reporting

1. Introduction

Recently, corner store chain plans to further expand their business by opening new shops in different new locations which they had never operated before. Since it is an unfamiliar area, the company will like to gain a rough idea of what to expect of from their sales and estimating the particular distinctiveness of the area that they need to think about before establishing their business there. Therefore, a statistical analysis and research is being conducted in order to find out all these.

The objective of this report is so that the company can evaluate the situation by using certain variables to increase the sales of the business. In order to achieve this objective, regression analysis is used and a total of 6 variables are used to conduct this analysis.

2. Literature review

Companies tend to look for growth of their earnings by adopting various strategies and one of them is by opening new outlets. Sales forecast is being done for potential store locations and for many years many researchers have been using different kinds of research methodologies to achieve this.

According to Duggal, N (2007), methods of analysis of trade areas are classified into 2 categories which are: basic method for trade area analysis and gravitational methods for trade analysis.

The basic method usually uses the performance metrics of a company’s present store in order to project sales at the new area. (Rogers and Green 1979, cited in Duggal 2007). This method is frequently implemented by regression analysis which our current research is using as well. The gravitational methods for trade analysis uses a consumer based approach or a store based approach to gain information. This model takes into consideration all the factors surrounding the store and consumers which includes distance and time travelled to the store.

3. Data

In this research, 51 corner stores from different locations in Australia are being observed. Out of the 6 variables being...