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b-2. Using the MAD method of testing the forecasting models performance, plus actual data from 3 years ago through the second quarter of this year, how well did the model perform? Based on MAD, an a performs better than an a of (Click to select) c. Using the decomp (Click to select) 0.3 0.2 hod of forecasting, forecast earnings per share for the last two quarters of this year and all four quarters of next year. (Negative values should be indicated by a minus sign. Kound your answers to 3 decimal places.)b-2. Using the MAD method of testing the forecasting models performance, plus actual data from 3 years ago through the second quarter of this year, how well did the model perform? Based on MAD, an α of (Click to select) # 1 performs better than an α c. Using the decomposition of a time series method of forecasting, forec 0.3 (Click to select) 0.2 for the last two quarters of this year and all four quarters of next year. (Negative values should be indicated by a minus sign. Round your answers to 3 decimar places.)IV d. Using your forecasts, comment on each company. Company As EPS is a V (Click to select) Company Bs EPS is ar downward trend upward trendCompany Bs EPS is al V (Click to select) downward trend upward trend ReferencesHere are earnings per share for two companies by quarter from the first quarter of three years ago through the second quarter of this year. Forecast earnings per share for the rest of this year and next year. Use exponential smoothing to forecast the third period of this year, and the time series decomposition method to forecast the last two quarters of this year and all four quarters of next year. (It is much easier to solve this problem on a computer spreadsheet so you can see what is happening.) EARNINGS PER SHARE QUARTER COMPANY A COMPANY B $1.65 2.37 1.17 1.22 1.63 2.05 1.21 0.31 0.31 $0.16 0.19 0.24 0.33 0.25 0.34 0.35 0.46 0.32 0.45 0.47 0.48 0.27 0.48 3 years ago 2 years ago last year -0.24 (loss) -0.92 (loss) 0.40 this year -1.62 (loss) 0.35a. For the exponential smoothing method, choose the first quarter of 3 years ago as the beginning forecast Make two forecasts: one with α = 0.20 and one with α should be indicated by a minus sign. Round your answers to 3 decimal places.) 0.30 Negative values CompanyA Forecast a 0.20 Forecast 0.30 Forecast a-0.20 Company B Forecast a 0.30 Quarter 3 years ago 2 years ago last year this year b-1. Calculate the MAD for each forecast using data starting with second quarter of 3 years ago through second quarter of this year. (Round your answers to 3 decimal places.) MAD Company A Company E 0.20 0.30b-2. Using the MAD method of testing the forecasting models performance, plus actual data from 3 years ago through the second quarter of this year, how well did the model perform? Based on MAD, an a of (Click to select) # performs better than an α of (Click to select) c. Using the decomposition of a time series method of forecasting, forecast earnings per share for the last two quarters of this year and all four quarters of next year. (Negative values should be indicated by a minus sign. Round your answers to 3 decimal places.) Company A Company B Quarter Seasonal Factor Seasonal Factor this year next year d. Using your forecasts, comment on each company. Company As EPS is an (Click to select) Company Bs EPS is an (Click to select) #

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Answer #1

1 Company A y = 2.276 +-0.215*x Com A Trend Seasonal Seasonal Forecast, α- 0.20 4Year rter Time indexEPS 5 3 yrs ago Line Ratio Index Forecast Abs. Error Forecast Abs. Error 0 2 2 4.419 0 13 ast year 2 21 next year! MAD 1.209 MAD= 0.946 MAD 0.818Formulas: Cell Formula Copy to E5 |=FORECAST(C5,SDS5:SDS18,SCS5:SCS18) | E5:E24 F5:F18 G5:G8 H5:H24 15:118 K6:K19 L5:L18 N6:N0 1 Company B y = 0.224 + 0.014*x Com B Trend Seasonal Seasonal Forecast, α 0.10 Forecast, α : 0.20 4 Yeater Time indexEPS (y)eRatio Index Forecast Abs. Error Forecast Abs. Error Forecast Abs. Error 0.769 0.003 0.027 0.006 0.010 0.023 0.026 0.035 0.011 0.069 0.056 0.034 0.028 0.106 0.017 0.180 0.238 0.755 0.253 0.910 0.2671.086 1.065 0.281 1 0.296 0.310 0.936 0.3240.956 0.339 1.240 0.353 0.963 0.367 1.171 0.382 1.153 0.396 1.137 0.410 0.4251.060 0.439 0.453 0.468 0.482 0.496 0.511 0.183 0.257 0.284 0.340 0.227 0.316 0.345 0.409 0.271 0.374 0.406 0.478 0.316 0.433 0.467 0.547 0.360 0.180 0.180 0.190 0.210 0.238 0.240 0.250 0.262 0.294 0.303 0.328 0.351 0.371 0.338 0.361 0.23 0.180 0.050 0.105 0.155 0.039 0.075 0.088 0.189 0.090 0.050 0.100 0.140 0.012 0.050 0.060 0.158 0.046 0.127 0.112 0.099 0.161 1.244 1 0.846 1.207 0.196 0.211 0.215 0.222 0.231 0.250 0.259 0.276 0.293 0.308 0.298 0.314 12 0.42 13 last year 0.43 0.44 0.45 0.164 0.157 0.098 0.152 0.512 0.45 21 next year 0.529 0.616 MAD 25 0.032 MAD 0.118 MAD 0.094

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