BUSINESS STATISTICS PROJECT

THE TAMIL NADU NATIONAL LAW SCHOOL,

TIRUCHIRAPPALLI.

ACADEMIC SESSION
2016-2017
BUSINESS STATISTICS PROJECT
ON
STUDY OF CORRELATION BETWEEN DIFFERENT VARIABLES OF
DIFFERENT COMMUNICATION COMPANIES
SUBMITTED TO:

SUBMITTED BY:

DR. P.KUMARESAN

SAXENA UTSAV

TNNLS,

B. Com. LL.B (HONS.)

Tiruchchirappalli

ROLL NO. BC0140051

BUSINESS STATISTICS PROJECT

ACKNOWLEDGEMENTS

At the outset, the researcher take this opportunity to thank my Dr. P. Kumaresan from the bottom
of my heart who has been of immense help during moments of anxiety and torpidity while the
project was taking its crucial shape.
Secondly, the researcher convey my deepest regards to the administrative staff of TNNLS who
held the project in high esteem by providing reliable information in the form of library
infrastructure and database connections in times of need.
Thirdly, the contribution made by my parents and friends by foregoing their precious time is
unforgettable and highly solicited. Their valuable advice and timely supervision paved the way
for the successful completion of this project. Hence as a student, the researcher am extremely
grateful and forever deeply indebted to him.
Finally, the researcher thanks the Almighty who gave me the courage and stamina to confront all
hurdles during the making of this project.

Words arent sufficient to acknowledge the

tremendous contributions of various people involved in this project--- as the researcher know
Words are Poor Comforters. the researcher once again wholeheartedly and earnestly thank all
the people who were involved directly or indirectly during this project making which helped me
to come out with flying colors.

BUSINESS STATISTICS PROJECT

METHODOLOGY

The researcher has worked on this project STUDY OF CORRELATION BETWEEN

DIFFERENT VARIABLES OF DIFFERENT COMMUNICATION COMPANIES. For this
project the researcher has used analytical method of research. The researcher has used the
secondary resources, which the researcher has taken from various media-journals, online
resources etc. and only secondary data has been used while making this assignment. The
researcher has collected the data from the websites. For the purpose of the project the researcher
has taken the profit and loss a/c of 5 different companies i.e. Bharti Airtel, Idea Cellular, MTNL,
Reliance Communication, Tata communications. The researcher has taken the data of the last 5
years for the purpose and accordingly it has been used.

OBJECTIVES

The objectives of making this project i.e. STUDY OF CORRELATION BETWEEN

DIFFERENT VARIABLES OF DIFFERENT COMMUNICATION COMPANIES is to know
about the concept of correlation analysis and for the better understanding of the concept the
researcher has taken the data from the different communication companies. This research work is
to know about the relationship between the different variable of the company and how does it
affect the other variables. By this work the researcher will try to analyze the methods of
calculating the correlation and which method can be applied for the purpose. Lastly, this project
is to know about the relationship between the different variables of a company.

BUSINESS STATISTICS PROJECT

INTRODUCTION
Statistics is a branch of mathematics dealing with the collection, analysis, interpretation, and
presentation of masses of numerical data1 or in the very simple term it can be said that it is
collection of quantitative data. The main objective of the statistics is to collect, analyze, interpret
and present the numerical data which can be helpful for the people in their daily life. Correlation
is a statistical tool that helps to measure and analyze the degree of relationship between two
variables. Correlation analysis deals with the association between two or more variables.
Correlation denotes the interdependency among the variables for correlating two phenomenons,
it is essential that the two phenomenons should have cause-effect relationship and if such
relationship does not exist then the two phenomenons cannot be correlated.
In the research work the researcher will analyze the correlation between the variable of the
company and for the same data will be collected from the Profit & loss account of the respective
companies. During the course of the project the researcher the researcher will firstly analyze the
concept of correlation and what are the types of the correlation. Further what are the different
methods to calculate the correlation between the two or more variables. Moreover the researcher
will conclude this work by finding out the relationship between the different variables of the
company and how does one variable affects another as well with the correlation analysis.

1 http://www.merriam-webster.com/dictionary/statistics
4

BUSINESS STATISTICS PROJECT

MEANING OF CORRELATION:
Correlation means a mutual relationship or connection between two or more things. In other
words correlation can be defined as the process of establishing a relationship or connection
between two or more things.
Correlation is a statistical measure that indicates the extent to which two or more variables
fluctuate together. A positive correlation indicates the extent to which those variables increase or
decrease in parallel; a negative correlation indicates the extent to which one variable increases as
the other decreases.2 There are some definition given by the scholars of Statistics:
Croxton and Cowden says, "When the relationship is of a quantitative nature, the appropriate
statistical tool for discovering and measuring the relationship and expressing it in a brief formula
is known as correlation".
A.M. Tuttle says, "Correlation is an analysis of the co-variation between two or more variables."
W.A. Neiswanger says, "Correlation analysis contributes to the understanding of economic
behaviour, aids in locating the critically important variables on which others depend, may reveal
to the economist the connections by which disturbances spread and suggest to him the paths
through which stabilizing forces may become effective.
L.R. Conner says, "If two or more quantities vary in sympathy so that the movements in one
tends to be accompanied by corresponding movements in others than they are said to be
correlated.
Utility of Correlation
By the help of the correlation concept, relation between two things can be extracted and this can
be very significant and helpful in the real life. Some of them are:
2 http://whatis.techtarget.com/definition/correlation.
5

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With the help of correlation analysis, we can measure in one figure, the degree of
relationship existing between variables like price, demand, supply, income, expenditure
etc. Once we know that two variables are correlated then we can easily estimate the value
of one variable, given the value of other.

Correlation analysis is of great use to economists and businessmen, it reveals to the

economists the disturbing factors and suggest to him the stabilizing forces. In business, it
enables the executive to estimate costs, sales etc. and plan accordingly.

Correlation analysis is helpful to scientists. Nature has been found to be a multiplicity of

inter-related forces.

TYPES OF CORRELATION:
1. POSITIVE CORRELATION:
Positive correlation occurs when an increase in one variable increases the value in another. That
means a correlation is said to be positive correlation if the values of two variables changing with
same direction. Ex. Pub. Exp. & sales, Height & weight.
2. NEGATIVE CORRELATION
Negative correlation occurs when an increase in one variable decreases the value of another. It
means that the correlation is said to be negative correlation when the values of variables change
with opposite direction. Ex. Price & qty. demanded.
3. SIMPLE CORRELATION:
Under simple correlation problem there are only two variables are studied and at the end only
relationship between the two variables is derived.
4. MULTIPLE CORRELATION:
Under Multiple Correlation three or more than three variables are studied. For example the
relationship between the height, weight and breadth etc.
6

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PARTIAL CORRELATION:
Analysis recognizes more than two variables but considers only two variables keeping the
other constant. It means that the correlation is calculated by taking some of the variables
at a time while keeping the other constant and otherwise taking the other while keeping
the others constant.
TOTAL CORRELATION:
It is based on all the relevant variables, which is normally not feasible while calculating
the correlation.
5. LINEAR CORRELATION:
Correlation is said to be linear when the amount of change in one variable tends to bear a
constant ratio to the amount of change in the other. The graph of the variables having a linear
relationship will form a straight line.
Ex. X = 1, 2, 3, 4, 5, 6, 7, 8.
Y = 5, 7, 9, 11, 13, 15, 17, 19.

6. NON LINEAR CORRELATION:

The correlation would be non linear if the amount of change in one variable does not bear a
constant ratio to the amount of change in the other variable.

PROPERTIES OF CORRELATION
1. Correlation is unit free.
2. Correlation, r, is limited to 1 r 1.
3. For a positive association, r > 0; for a negative association r < 0.
4. Correlation, r, measures the linear association between two quantitative variables.
5. Correlation measures the strength of a linear relationship only.
7

BUSINESS STATISTICS PROJECT

6. The closer r is to 0 the weaker the relationship; the closer to 1 or 1 the stronger the
relationship.
7. -1 is the perfect negative correlation and +1 is the perfect positive correlation.
8. Strong positive correlation is 0.8 and strong negative correlation is (- 0.8).

METHODS OF CALCULATING CORRELATION

Scatter Diagram Method

Graphic Method
Karl Pearsons Coefficient of Correlation
Method of Least Squares

SCATTER DIAGRAM METHOD:

Scatter Diagram is a graph of observed plotted points where each points represents the values of
X & Y as a coordinate. It portrays the relationship between these two variables graphically.
Advantages of Scatter Diagram
Simple & Non Mathematical method
Not influenced by the size of extreme item
First step in investing the relationship between two variables
Disadvantage of scatter diagram
Cannot adopt the an exact degree of correlation

KARL PEARSONS COEFFICIENT OF CORRELATION

Correlation coefficient

BUSINESS STATISTICS PROJECT

The correlation coefficient, r, is a summary measure that describes the extent of the statistical
relationship between two interval or ratio level variables. Methods of correlation summarize the
relationship between two variables in a single number called the correlation coefficient. The
correlation coefficient is usually given the symbol r and it ranges from -1 to +1. A correlation
coefficient quite close to 0, but either positive or negative, implies little or no relationship
between the two variables. A correlation coefficient close to plus 1 means a positive relationship
between the two variables, with increases in one of the variables being associated with increases
in the other variable. A correlation coefficient close to -1 indicates a negative relationship
between two variables, with an increase in one of the variables being associated with a decrease
in the other variable. A correlation coefficient can be produced for ordinal, interval or ratio level
variables, but has little meaning for variables which are measured on a scale which is no more
than nominal. For ordinal scales, the correlation coefficient which is usually calculated is
Spearmans rho. For interval or ratio level scales, the most commonly used correlation
coefficient is Pearsons r, ordinarily referred to as simply the correlation coefficient or r.

STEPS IN CALCUALTING THE CORRELATION COFFICIENT

The procedure for determining the correlation coefficient is as follows in the given steps:

Step down a list of all the observations for the two variables X and Y in the first two
columns (A and B). Remember, X is the independent variable and Y is dependant

variable.
For each variable, add up all the values of the observations and divide by the total

number of them to obtain the means xx and Y

at the bottom of the each column.

In columns C and D, calculate the residuals (X- xx) and (Y- Y ) by subtracting the mean

from each value.

In columns E and F, square the answers that you got in columns C and D to obtain (X- xx)

and (Y- Y ) .

In column G, multiply the values in column C by the values in column D to obtain (X- xx).

(Y- Y ).
9

BUSINESS STATISTICS PROJECT

For columns E, F and G add up all values in each column to obtain a total at the bottom
of each column. These are the numbers that will go into the equation.
The formula for calculating the correlation coefficient is given below: [ ( X x ) ( Y Y ) ]
r=
2
( X x ) (Y Y )
x Y

Where,
METHODS

OF

are the mean values of the particular variables.

DERIVING

CORRELATION

FROM

COEFFICIENT OF r:The Coefficient of correlation can be derived by three methods:

1) Direct method
X . Y
X .Y
N
r=
2
2
2 ( X )
2 ( Y )
X
Y
N
N

Where
r = Coefficient of correlation
X= Value of X (independent Variable)
X= summation of X
Y= Value of Y (dependent variable)
Y= Summation of Y
X.Y= Value of X Value of Y
XY= Summation of X.Y
2
X = Summation of X X
2
Y = Summation of Y Y

N= Number of observations.

2) Derivations taken from the Arithmetic Mean:

r=

xy
x2 y2

Where
r = Coefficient of correlation
10

KARL

PEARSONS

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x = X-X (where X is the arithmetic mean of X values)
y = Y-Y (where Y is the arithmetic mean of Y values)

X=

Y=

N = Number of observations.
= Summation.

3) Derivation taken from the Assumed Mean

dx . dy
r=

dx . dy
N

2
(dx )2
2 ( dy)
dx
dy
N
N
2

Where
r = Coefficient of correlation
dx= X- AM ( AM is assumed mean )
dy= Y- AM ( AM is Assumed Mean)
N = Number of observations.
d x

= dx dx

2
d y = dy dy

= Summation.

11

BUSINESS STATISTICS PROJECT

PROFILE OF THE COMPANIES:
IDEA CELLULAR:
Idea Cellular (commonly referred to as simply Idea, and stylised as !dea) is an Indian mobile
network operator based in Mumbai, Maharashtra. Idea is a pan-India integrated GSM operator
offering 2G,3G and 4G mobile services. Idea is Indias third largest mobile operator by subscriber
base, After Vodafone India. Idea has 182 million subscribers as of 31 December 2015.3

BHARTI AIRTEL:
Bharti Airtel Limited is a leading global telecommunications company with operations in 19
countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks
amongst the top 3 mobile service providers globally in terms of subscribers. In India, the
company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed
line services, high speed DSL broadband, IPTV, DTH, enterprise services including national &
international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G,
4G wireless services and mobile commerce. Bharti Airtel had nearly 358 million customers
across its operations at the end of June 2016.4
RELIANCE COMMUNICATION:
Reliance Group, an offshoot of the Group founded by Shri Dhirubhai H Ambani (1932-2002),
ranks among India's top private sector business houses in terms of net worth. The group has
business interests that range from telecommunications (Reliance Communications Limited) to
financial services (Reliance Capital Ltd) and the generation and distribution of power (Reliance
Power Limited and Reliance Infrastructure Limited). Reliance Communications has established a
pan-India, next generation, integrated (wireless and wireline), convergent (voice, data and video)
digital network that is capable of supporting best-of-class services spanning the entire
communications value chain, covering over 21,000 cities and towns and over 400,000 villages.
Reliance Communications owns and operates the world's largest next generation IP enabled

3 https://en.wikipedia.org/wiki/Idea_Cellular
4 http://www.airtel.in/about-bharti/equity/
12

BUSINESS STATISTICS PROJECT

connectivity infrastructure, comprising over 280,000 kilometers of fibre optic cable systems in
India, USA, Europe, Middle East and the Asia Pacific region.5
TATA COMMUNICATIONS:
Tata Communications is a global company with its roots in the emerging markets. Headquartered
in Mumbai and Singapore, it has more than 8,000 employees across 38 countries. The $3.2
billion company is listed on the Bombay Stock Exchange and the National Stock Exchange of
India and is the flagship telecoms arm of the $103.3 billion Tata Group.6
MTNL
Mahanagar Telephone Nigam Limited (MTNL) is a state-owned telecommunications service
provider in the metro cities of Mumbai and New Delhi in India and in the island nation
of Mauritius in Africa. The company had a monopoly in Mumbai and New Delhi until 1992,
when the telecom sector was opened to other service providers. "Transparency makes us
different" is the motto of the company. The Government of India currently holds 100% stake in
the company.7

5 http://www.rcom.co.in/Rcom/aboutus/overview/overview_reliancegroup.html
6 http://www.tatacommunications.com/about
7 https://en.wikipedia.org/wiki/Mahanagar_Telephone_Nigam
13

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CORRELATION ANALYSIS OF COMPANIES VARIABLES:

IDEA CELLULAR:
Variables of Sales turnover, total expences and total income of IDEA CELLULAR.8
2011-12

(in 2012-2013(in

100 Crores)

100 Crores)

2013-14

(in 2014-2015

2015-16

100 Crores)

(in

358
359
239

100 100 Crores)

Sales

192

220

261

Crores)
312

turnover
Total income
Total

193
150

220
169

261
188

317
216

expenditure
Correlation between sales turnover and total income:
Variable
2011-12
2012-13
2013-14
2014-15
2015-16

X ( sales turnover)
192
220
261
312
358
Formula:

dx . dy
r=

dx 2

Y (total income)
193
220
261
317
359

dx . dy
N

(dx )2
( dy)2
dy 2
N
N
Where ..

dx=XAM

dx 2

dy=YAM

(here AM=

dy 2

(here AM=

8 http://www.moneycontrol.com/financials/ideacellular/profit-loss/IC8
14

(in

dx dy

BUSINESS STATISTICS PROJECT

260)
-68
-40
1
52
98
dx=51

192
220
261
312
358

4624
1600
1
2704
9604

260)
-67
-41
1
57
99
dy=49

193
220
261
317
359

dx 2= 1
8533
Hence:
18863
r=

51 49
5

(51)2
( 49)2
18533
19221
5
5

943152499
5
r=
926652601
961052401

5
5

r=

91816
5

90064
93704

5
5

r=

18363.2
18012.8 18740.8

r=

18363.2
134.21 136.90

r=

18363.2
18373.34

15

4489
1681
1
3249
9801
2
dy

4556
1640
1
2964
9702
dx dy=

= 19221

18863

BUSINESS STATISTICS PROJECT

r=0.999
Correlation between total income and total expenditure:
Variable
2011-12
2012-13
2013-14
2014-15
2015-16

X ( total income)
193
220
261
317
359

Y (total expenditure)
150
169
188
216
239

Formula:

dx . dy
r=

dx . dy
N

2
(dx )2
2 ( dy)
dx
dy
N
N
2

dx=XAM

dx 2

dy=YAM

(here AM=
200)
-7
20
61
117
159
dx=

193
220
261
317
359

7071
r=

dx dy

(here AM=
49
400
3721
13689
25281
2
dx

357

dy 2

200)
-50
-31
-12
16
39
dy=

150
169
188
216
239

-38

= 43140

357 38
5

(357)2
(38)2
43140
5328
5
5

16

2500
961
144
256
1521
2
dy

350
-620
-732
1872
6201
dx dy=

= 5328

7071

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35355(13566)
5
r=
215700127449
266401444

5
5

48921
5
r=
88251
25196

5
5

r=

9420 .2
17650.2 5039.2

r=

9420 .2
132.85 70.98

r=

9420 .2
9429.69

r=0.999

BHARTI AIRTEL
Variables of Sales turnover, total expences and total income of Bharti Airtel9
2011-12

Sales

(in 2012-2013(in

2013-14

(in 2014-2015

100 Crores)

100 Crores)

100 Crores)

(in

416

453

499

Crores)
554

(in

100 100 Crores)

9 http://www.moneycontrol.com/financials/bhartiairtel/profit-loss/BA08
17

2015-16

603

BUSINESS STATISTICS PROJECT

turnover
Total income
Total

422
279

468
318

505
336

606
360

611
379

expenditure
Correlation between sales turnover and total income:
Variable
2011-12
2012-13
2013-14
2014-15
2015-16

X ( sales turnover)
416
453
499
554
603

Y (total income)
422
468
505
606
611

Formula:

dx . dy
r=

dx . dy
N

2
(dx )2
2 ( dy)
dx
dy
N
N
2

Where ..
X

dx=XAM

dx 2

dy=YAM

(here AM=
416
453
499
554
603

450)
-34
3
49
104
153
dx=
275

dy 2

dx dy

(here AM=
1156
9
2401
10816
23409

450)
-28
18
55
156
161
dy=

422
468
505
606
611

dx = 3

362

7791
Hence:
18

784
324
3025
24336
25921
2
dy

952
54
2695
16224
24633
dx dy=

= 54390

44558

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44558
r=

275 362
5

(275)2
(362)2
37791
54390
5
5

22279099550
5
r=
18895575625
271950131044

5
5

r=

123240
5

113330
140906

5
5

r=

24648
22666 28181.2

r=

24648
150.55 167.87

r=

24648
25272.82

r=0.975

Correlation between total income and total expenditure:

Variable
2011-12
2012-13
2013-14
2014-15
2015-16

X (total income)
422
468
505
606
611

19

Y (total expenditure)
279
318
336
360
379

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Formula:

dx . dy
r=

dx 2

dx . dy
N

(dx )2
( dy)2
dy 2
N
N

Where ..
X

dx=XAM

422
468
505
606
611

dx

dy=YAM

(here AM=

(here

500)
-78
-32
5
106
111
dx=

AM=300)
-21
18
36
60
79
dy=

6084
1024
25
11236
12321

279
318
336
360
379

dx = 3

112

172

0690
Hence:
16371
r=

112 172
5

(112)2
(172)2
30690
11902
5
5

20

dy

dx dy

441
324
1296
3600
6241
2
dy

1638
-576
180
6360
8769
dx dy=

= 11902

16371

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8185519264
5
r=
15345012544
5951029584

5
5

r=

62591
5

140906
29926

5
5

r=

12518.2
28181.5 5985.2

r=

12518.2
167.87 77.36

r=

12518.2
12986.42

r=0.963

RELIANCE COMMUNICATION
Variables of Sales turnover, total expences and total income of Reliance Communication 10
2011-12

(in 2012-2013(in

2013-14

(in 2014-2015

2015-16

100 Crores)

100 Crores)

100 Crores)

(in

Sales

111

112

111

Crores)
108

99

turnover
Total income
Total

118
87

128
85

124
93

141
91

102
78

100 100 Crores)

expenditure

10 http://www.moneycontrol.com/financials/reliancecommunications/profitloss/RC13
21

(in

BUSINESS STATISTICS PROJECT

Correlation between sales turnover and total income:
Year
2011-12
2012-13
2013-14
2014-15
2015-16

X (Sales Turnover)
111
112
111
108
99

Y (total income)
118
128
124
141
102

Formula:

dx . dy
r=

dx 2

dx . dy
N

(dx )2
( dy)2
dy 2
N
N
Where ..

dx=XAM

dx

dy=YAM

(here AM=
100)
11
12
11
8
-1
dx=

111
112
111
108
99

121
144
121
64
1

120)
-2
8
4
21
-18
dy=

118
128
124
141
102
2

13

51
Hence:
304
r=

dx dy

(here AM=

dx = 4

41

dy

41 13
5

(41)2
( 13)2
451
849
5
5
22

4
64
16
441
324
2
dy

-22
96
44
168
18
dx dy

= 849

304

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1520533
5
r=
22551681
4245169

5
5

r=

987
5

574
4076

5
5

r=

197.4
114.8 815.2

r=

197.4
10.7 28.55

r=

197.4
304.95

r=0.648

Correlation between total income and total expenditure:

Year
2011-12
2012-13
2013-14
2014-15
2015-16
Formula:

X (total income)
118
128
124
141
102

dx . dy
r=

dx . dy
N

2
(dx )2
2 ( dy)
dx
dy
N
N
2

Where ..
23

Y (total expenditure)
87
85
93
31
78

BUSINESS STATISTICS PROJECT

X

dx=XAM

dx 2

dy=YAM

(here AM=
120)
-2
8
4
21
-18
dx=

118
128
124
141
102

13

r=

849

4
64
16
441
324
2
dx

80)
7
5
13
11
-2
dy=

87
85
93
91
78

35

849

(13)(35)
5

( 13)2
(35)2
368
5
5

1725455
5
r=
4245169
18401225

5
5

r=

1270
5

4076
615

5
5

r=

254
815.2 123

r=

254
28.55 11.09

r=

254
316.6

dx dy

49
25
169
121
4
2
dy

-14
40
52
231
36
dx dy

= 368

345

(here AM=

Hence:
345

dy 2

24

BUSINESS STATISTICS PROJECT

r=0.802

TATA COMMUNICATION.
Variables of Sales turnover, total expences and total income of Tata Communication. 11
2011-12

(in 2012-2013(in

100 Crores)

100 Crores)

2013-14

(in 2014-2015

2015-16

100 Crores)

(in

479
470
361

Sales

409

441

437

Crores)
431

turnover
Total income
Total

427
310

495
341

492
337

503
329

(in

100 100 Crores)

expenditure
Correlation between sales turnover and total income:
Year
2011-12
2012-13
2013-14
2014-15
2015-16

X (Sales Turnover)
409
441
437
431
479

Y (total income)
427
495
492
503
470

11 http://www.moneycontrol.com/financials/tatacommunications/profit-loss/TC17
25

BUSINESS STATISTICS PROJECT

Formula:

dx . dy
r=

dx 2

dx . dy
N

(dx )2
( dy)2
dy 2
N
N
Where ..

dx 2

dx=XAM

dy=YAM

(here AM=
435)
-26
6
2
-4
44
dx=

409
441
437
431
479

676
36
4
16
1936

450)
-23
45
42
53
20
dy=

427
495
492
503
470

dx 2= 2

137

668
Hence:

r=

22 137
5

(22)2
(137)2
2668
7167
5
5

81003014
5
r=
13340484
3583518769

5
5

dx dy

529
2025
1764
2809
40
2
dy

598
270
84
-212
880
dx dy

= 7167

1620

(here AM=

22

1620

dy 2

26

BUSINESS STATISTICS PROJECT

5086
5
r=
12856
17066

5
5

r=

1017.2
2571.2 3413.2

r=

1017.2
50.70 58.42

r=

1017.2
2961.89

r=0.343
Correlation between total income and total expenditure:
Year
2011-12
2012-13
2013-14
2014-15
2015-16

X (total income)
427
495
492
503
470

Y (total expenditure)
310
341
337
329
361

Formula:

dx . dy
r=

dx 2

dx . dy
N

(dx )2
( dy)2
dy 2
N
N
Where ..

dx=XAM

dx 2

dy=YAM

(here AM=

(here AM=
27

dy 2

dx dy

BUSINESS STATISTICS PROJECT

450)
-23
45
42
53
20
dx=

427
495
492
503
470

529
2025
1764
2809
400
2
dx

137

335)
-25
6
2
-6
26
dy

310
341
337
329
361

= 7527

Hence:
1131
r=

r=

7527

137 3
5

(137)2
(3)2
1377
5
5
5655411
5

3763518769
68859

5
5

5244
5
r=
18866
6876

5
5

r=

1048.8
3773.2 1375.2

r=

1048.8
61.42 37.08

r=

1048.8
2277.45

r=0.460

28

625
36
4
36
676
2
dy

575
270
84
-318
520
dx dy

= 1377

1131

BUSINESS STATISTICS PROJECT

MTNL
Variables of Sales turnover, total expences and total income of MTNL.12
2011-12

Sales

(in 2012-2013(in

2013-14

(in 2014-2015

2015-16

10 Crores)

10 Crores)

10 Crores)

(in

10 10 Crores)

337

342

339

Crores)
340

319

362
522

371
635

375
431

382
412

382
393

turnover
Total income
Total
expenditure
Correlation between sales turnover and total income:
Year
2011-12
2012-13
2013-14
2014-15
2015-16

X (Sales Turnover)
337
342
339
340
319

Y (total income)
362
371
375
382
382

Formula:

dx . dy
r=

dx . dy
N

2
(dx )2
2 ( dy)
dx
dy
N
N
2

12 http://www.moneycontrol.com/financials/mahanagartelephonenigam/profitloss/MTN
29

(in

BUSINESS STATISTICS PROJECT

Where ..
X

dx=XAM

337
342
339
340
319

dx

dy=YAM

(here AM=

(here AM=

325)
12
17
24
15
-6
dx=

370)
-8
1
5
12
12
dy=

144
289
576
225
36

362
371
375
382
382

dx 2= 1

62

22

270
Hence:
149
r=

1270

62 22
5

(62)2
(22)2
378
5
5

7451364
5
r=
63503844
1890484

5
5

r=

619
5

2506
1406

5
5

r=

123.8
501.2 281.2

r=

123.8
22.38 16.76

30

dy

dx dy

64
1
25
144
144
2
dy

-96
17
120
180
-72
dx dy

= 378

149

BUSINESS STATISTICS PROJECT

r=

123.8
375.08

r=0.330
Correlation between total income and total expenditure:
Year
2011-12
2012-13
2013-14
2014-15
2015-16

X (total income)
362
371
375
382
382

Y (total expenditure)
522
635
431
421
393

Formula:

dx . dy
r=

dx . dy
N

2
(dx )2
2 ( dy)
dx
dy
N
N
2

Where ..
X

dx=XAM

dx 2

dy=YAM

(here AM=
362
371
375
382
382

370)
-8
1
5
12
12
dx=
22

dy 2

dx dy

484
18225
4761
6241
11449
2
dy

-176
135
-345
-948
-1284
dx dy

= 41160

-2618

(here AM=
64
1
25
144
144
2
dx

500)
22
135
-69
-79
-107
dy

522
635
431
421
393

-98

= 378

Hence:

31

BUSINESS STATISTICS PROJECT

2618
r=

22 98
5

(22)2
(98)2
378
41160
5
5

13090(2156)
5
r=
1890484
2058009604

5
5

r=

10934
5

1406
196196

5
5

r=

2186.8
281.2 39239.2

r=

2186.8
16.76 198.08

r=

2186.8
3319.82

r=0.658

CONCLUSION:
From the calculation made above, the researcher has reached to the conclusion that there is a
strong positive and negative correlation between the sales turnover, total income and total
expenditure of the companies mentioned.

32

BUSINESS STATISTICS PROJECT

In case of the Idea Cellular, from the calculation it is evident that there is a strong positive
correlation between the sales turnover and total income as value of r is 0.999. also there is a
strong positive correlation between the total income and total expenditure because coefficient of
correlation is 0.999 it means that the expenditure of the company is approximately same as the
income of the company. It means that the profit at the last of the year is very nominal.
While dealing with the Bharti Airtel, it is found that in the company there is a strong positive
correlation between the sales turnover and total income of the company as the value of r is 0.975.
it shows that all most of the income or it can be said that approximately the whole of the income
of the company comes from the sales. Also there is a strong positive correlation between total
income and total expenditure of the company (value of karl Pearsons coefficient is 0.963). So, it
can be inferred that the companies expenses are as much as its income and increase in the
income will increase the expenditure while decrease in the income will surely decrease the
expenditure.
Reliance Communication- it is observed from this research work that there is a positive
correlation between the sales turnover and total income of the company(0.648) and also between
the total income and total expenditure of the company(0.802). So, from this it can be inferred
that there is a very strong relationship between these variables and if something happens with
one it will affect the other in the same manner eventually. By the calculation it is evident that
there exist a strong positive correlation between the variables taken.
Tata Communication -There is strong positive correlation between the sales turnover and total
expenditure and also there is a positive correlation between the total income and total
expenditure of the Tata communication. By the study, it is found that the value Karls coefficient
of correlation is 0.343 for the sales turnover and total income and for the total income and total
expenditure it is 0.460. It means that if the income increases, expenditure of the company
decreases or vice-versa.
Also in the case of MTNL there exist a strong negative correlation between the sales turnover
and total income with the value of Karls coefficient of correlation is -0.330 and also there exist a
strong negative correlation between the total income and total expenditure with the value of
-0.658.

33

BUSINESS STATISTICS PROJECT

In this research the researcher has obtained the profit and loss account of 5 communication
companies and to check the relation between the total turnover and total income and also to
check the relation between the total income and total expenditure. Thus, correlation is analysis
deals with the association between or more variables. It is a statistical device which helps us in
analyzing co variation of two or more variables.

34