The file Forbes2000.csv contains information about 2000 companies published by Forbes. The purpose of this analysis is to explore the relationship between profits and other company characteristics, compare companies from the United States and Japan, and build linear regression models to explain profits.
The table shows that Drugs & biotechnology has the highest average profits, while Telecommunications services has the lowest average profits. This indicates that average profits differ across company types.
country profits
60 United States 487.40
9 Canada 23.30
56 United Kingdom 21.72
2 Australia 18.08
49 South Korea 15.60
12 China 15.54
46 Russia 14.87
52 Switzerland 13.75
50 Spain 11.74
37 Netherlands/ United Kingdom 10.64
22 India 9.37
7 Bermuda 9.11
27 Italy 7.52
16 France 7.37
20 Hong Kong/China 7.33
28 Japan 7.07
15 Finland 7.05
8 Brazil 6.78
48 South Africa 6.33
53 Taiwan 5.68
14 Denmark 5.22
39 Norway 5.05
51 Sweden 4.78
30 Kong/China 4.76
24 Ireland 3.88
47 Singapore 3.58
6 Belgium 3.54
35 Mexico 3.41
34 Malaysia 3.41
55 Turkey 2.71
23 Indonesia 2.69
3 Australia/ United Kingdom 2.35
19 Greece 2.20
54 Thailand 1.64
57 United Kingdom/ Australia 1.64
45 Portugal 1.55
41 Panama/ United Kingdom 1.18
4 Austria 0.86
26 Israel 0.79
10 Cayman Islands 0.74
25 Islands 0.74
11 Chile 0.65
21 Hungary 0.55
13 Czech Republic 0.42
38 New Zealand 0.42
40 Pakistan 0.41
32 Liberia 0.28
44 Poland 0.28
29 Jordan 0.23
43 Philippines 0.22
5 Bahamas 0.20
58 United Kingdom/ Netherlands 0.14
31 Korea 0.12
61 Venezuela 0.12
42 Peru 0.11
1 Africa -0.01
59 United Kingdom/ South Africa -0.10
33 Luxembourg -0.25
36 Netherlands -1.09
18 Germany -2.48
17 France/ United Kingdom -2.83
Interpretation
The United States generates the highest total profits by a large margin, followed by Canada and the United Kingdom. In contrast, Germany, France/United Kingdom, and the Netherlands have negative total profits. This indicates that profits vary considerably across countries.
country sales
60 United States 7553.75
28 Japan 3220.24
56 United Kingdom 1430.98
18 Germany 1350.79
16 France 1266.43
36 Netherlands 476.58
52 Switzerland 423.53
27 Italy 418.77
9 Canada 360.06
49 South Korea 358.62
50 Spain 227.46
51 Sweden 199.31
2 Australia 194.05
37 Netherlands/ United Kingdom 184.20
7 Bermuda 136.81
12 China 127.49
15 Finland 113.21
22 India 104.44
53 Taiwan 96.30
8 Brazil 95.08
46 Russia 92.07
6 Belgium 91.03
39 Norway 86.24
35 Mexico 66.94
14 Denmark 63.49
48 South Africa 61.86
31 Korea 60.02
47 Singapore 58.96
55 Turkey 56.56
20 Hong Kong/China 40.88
24 Ireland 38.12
4 Austria 33.14
19 Greece 30.34
33 Luxembourg 28.37
34 Malaysia 27.46
45 Portugal 27.19
3 Australia/ United Kingdom 23.19
30 Kong/China 22.87
54 Thailand 22.62
23 Indonesia 17.15
26 Israel 16.48
1 Africa 13.64
57 United Kingdom/ Australia 10.01
10 Cayman Islands 8.30
58 United Kingdom/ Netherlands 7.54
21 Hungary 6.74
25 Islands 6.67
11 Chile 6.41
41 Panama/ United Kingdom 5.93
44 Poland 4.41
32 Liberia 3.78
13 Czech Republic 3.61
43 Philippines 3.13
38 New Zealand 2.64
59 United Kingdom/ South Africa 2.06
5 Bahamas 1.35
29 Jordan 1.33
40 Pakistan 1.23
17 France/ United Kingdom 1.01
61 Venezuela 0.98
42 Peru 0.17
Interpretation
The United States generates the highest total sales, followed by Japan, the United Kingdom, Germany, and France. The United States has substantially higher sales than any other country, indicating that sales are concentrated in a small number of countries.
The United States has the highest-ranked company in the dataset (rank 1), while the highest-ranked Japanese company is ranked 8th. This indicates that the top-ranked company is from the United States.
Banking Diversified financials
69 24
Consumer durables Transportation
22 20
Capital goods Construction
19 18
Business services & supplies Chemicals
17 14
Trading companies Materials
13 12
Retailing Utilities
12 11
Food drink & tobacco Drugs & biotechnology
10 9
Insurance Household & personal products
9 7
Media Technology hardware & equipment
7 6
Health care equipment & services Oil & gas operations
4 3
Semiconductors Software & services
3 3
Food markets Telecommunications services
2 2
Interpretation
Banking is the most common company type in both countries. However, the United States has more companies in Diversified financials, Utilities, and Health care equipment & services, while Japan has more companies in Consumer durables, Transportation, and Capital goods. This indicates differences in the industrial composition of the two countries.
Multiple Linear Regression
A multiple linear regression model was fit using assets, marketvalue, and sales as predictors of profits.
The regression model estimates profits using assets, marketvalue, and sales. The model explains approximately 31% of the variation in profits (R² = 0.306). All three predictors are statistically significant, although marketvalue has the strongest relationship with profits.
The ANOVA results show that marketvalue explains the largest amount of variation in profits (Sum Sq = 1552.8), followed by assets (Sum Sq = 312.8) and sales (Sum Sq = 35.8). This suggests that market value is the most important predictor of profits in the overall dataset.
The residual histogram shows that the residuals are not perfectly symmetric and contain some extreme values, indicating the presence of outliers.
The regression models for the United States and Japan show some important differences.
For the United States, assets, marketvalue, and sales are all significant predictors of profits. The ANOVA results indicate that assets and marketvalue are the most important variables, with assets explaining slightly more variation than marketvalue.
For Japan, assets and marketvalue are significant predictors of profits, but sales is not significant (p = 0.850). The ANOVA results show that assets explains the largest amount of variation in profits, followed by marketvalue, while sales contributes almost nothing to the model.
These results suggest that profits are related to company size and market value in both countries, but sales appear to be more important in the United States than in Japan.
Conclusion
This analysis explored how profits vary across company types and countries. Drugs & biotechnology had the highest average profits, while Telecommunications services had the lowest average profits. The United States generated the highest total profits and total sales by a large margin compared with all other countries.
The comparison between the United States and Japan showed that the highest-ranked company in the dataset was from the United States. Banking was the most common company type in both countries, although the distribution of company types differed between them.
The regression analysis showed that marketvalue was the strongest predictor of profits in the overall dataset. Separate models for the United States and Japan indicated that assets and marketvalue were important predictors in both countries, while sales was significant only in the United States. These findings suggest that the factors associated with company profits vary across regions.
