14.2 Pharmaceutical Industry. An equities analyst is studying the pharmaceutical industry and would like your help in exploring and understanding the financial data collected by her firm. Her main objective is to understand the structure of the pharmaceutical industry using some basic financial measures.

Financial data gathered on 21 firms in the pharmaceutical industry are available in the file Pharmaceuticals.xls. For each firm, the following variables are recorded:

1.Market capitalization (in billions of dollars)
2.Beta
3.Price/earnings ratio
4.Return on equity
5.Return on assets
6.Asset turnover
7.Leverage
8.Estimated revenue growth
9.Net profit margin
10.Median recommendation (across major brokerages)
11.Location of firm's headquarters
12.Stock exchange on which the firm is listed

 

Use cluster analysis to explore and analyze the given dataset as follows:

(a) Use only the quantitative variables (1-9) to cluster the 21 firms. Justify the various choices made in conducting the cluster analysis, such as weights accorded different variables, the specific clustering algorithm(s) used, the number of clusters formed, and so on.

(b) Interpret the clusters with respect to the quantitative variables that were used in forming the clusters.

(c) Is there a pattern in the clusters with respect to the qualitative variables (10-12) (those not used in forming the clusters)?

(d) Provide an appropriate name for each cluster using any or all of the variables in the dataset.

 

 

SymbolNameMarket_CaBetaPE_RatioROEROAABTAbbott Laboratories68.440.3224.726.411.8AGNAllergan, Inc.7.580.4182.512.95.5AHMAmersham plc6.30.4620.714.97.8AZNAstraZeneca PLC67.630.5221.527.415.4AVEAventis47.160.3220.121.87.5BAYBayer AG16.91.1127.93.91.4BMYBristol-Myers Squibb Company51.330.513.934.815.1CHTTChattem, Inc0.410.852624.14.3ELNElan Corporation, plc0.781.083.615.15.1LLYEli Lilly and Company73.840.1827.93113.5GSKGlaxoSmithKline plc122.110.351862.920.3IVXIVAX Corporation2.60.6519.921.46.8JNJJohnson & Johnson173.930.4628.428.616.3MRXMedicis Pharmaceutical Corporati1.20.7528.611.25.4MRKMerck & Co., Inc.132.560.4618.940.615NVSNovartis AG96.650.1921.617.911.2PFEPfizer Inc199.470.6523.645.619.2PHAPharmacia Corporation56.240.456.513.55.7SGPSchering-Plough Corporation34.10.5118.922.613.3WPIWatson Pharmaceuticals, Inc.3.260.2418.410.26.8WYEWyeth48.190.6313.154.913.4

• 1494316986-Pharmaceuticals.xls

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Status NEW Posted 09 May 2017 08:05 AM My Price 9.00

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