Explanation of Regression Formula




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Henry Lozada
Professor, Puerto Rico

Explanation of Regression Formula

The regression formula is:
Y = B0 + B1X or: Dependent variable = constant + B1independent variable

B1= for each change of the independent variable (X), it will increase or decrease the dependent variable (Y)
Rule of thumb:
T > 2 significant slope
T < 2 not significant slope
Hypothesis:
Ho: B0 = 0 there is no relationship
Ha: B0 =/= there is a relationship
R square (R2) = explains the % of dependent variable Y, is explained by the variability of the variable independent X
I will recomend to use SPSS. It provides the factor that you need to resolve your necesity. You need historical information of your financial statement / accounting (sales, cost, and other information)
I hope the information will help others.

   

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