Evaluate the forecast accuracy of the three methods

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Reference no: EM131396936

In the pharmaceutical industry select Pfizer, whose common stocks are traded in the US stock markets as your target company. Acquire the company's balance sheet and income statement for the most recent sixteen consecutive quarters.

Directions:

1. Based on the company's consolidated balance sheets and income statements, compile the 16 quarters of selected financial data that you chose for the project. These financial variables are: A ( from consolidated statements of earnings) Sales/revenues, Selling, marketing and administrative expenses, Research expenses, Net Earnings, and B (from consolidated balance sheets) Cash & cash equivalents, Total current assets, Total assets, Total current liabilities, Total liabilities, Total shareholders' equity.

2. Give a concise description of the company in your own words: its history, mission, and future opportunities (3 or 4 paragraphs).

3. Present and describe the sales/revenue data of the company. You may want to use a scatter-gram to display the time patterns of the sales/revenue.

4. Make sales/revenue forecasts for the next two quarters by using the following methods:

a. The Naïve Method

b. Single moving average (let N=4)

c. Single exponential smoothing (let a=0.4)

5. Evaluate the forecast accuracy of the three methods in item 4, by analyzing the magnitudes of errors, i.e. range of errors, MAE (Mean of Absolute Errors), and MSE (Mean of Squared Errors) of each method.

Reference no: EM131396936

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