b-2. (Options are 0.1 and 0.2)

d. Using your forecasts, comment on each company.

Company A's EPS is an: Upward Trend or Downward Trend

Company B's EPS is an: Upward Trend or Downward Trend

Here 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.) 3 years ago 2 years ago QUARTER 1 II III IV 1 II III IV ! 11 III IV 1 II EARNINGS PER SHARE COMPANY A COMPANY B $ 1.74 $ 0.21 2.30 0.28 0.20 1.34 0.29 1.27 0.24 1.72 0.33 2.13 0.25 1.26 0.26 0.38 0.41 0.38 0.23 -0.26 (loss) 0.38 -0.83 (loss) 0.37 0.23 0.36 -1.71 (loss) 0.34 0.26 0.36 last year this year a. For the exponential smoothing method, choose the first quarter of 3 years ago as the beginning forecast. Make two forecasts: one with a = 0.10 and one with a = 0.20. (Negative values should be indicated by a minus sign. Round your answers to 3 decimal places.) Company A Forecast a = 0.10 Forecast a= 0.20 Forecast a = 0.10 Company B Forecast a = 0.20 Quarter 1 3 years ago IV 2 years ago 1 II MI IV last year 1 II III IV this year 1 II 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 B a = 0.10 a = 0.20 b-2. Using the MAD method of testing the forecasting model's 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 a 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 Seasonal Factor Company B Seasonal Factor Quarter Forecast Forecast this year IV next year 1 Il III IV Here 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.) 3 years ago 2 years ago QUARTER 1 II III IV 1 II III IV ! 11 III IV 1 II EARNINGS PER SHARE COMPANY A COMPANY B $ 1.74 $ 0.21 2.30 0.28 0.20 1.34 0.29 1.27 0.24 1.72 0.33 2.13 0.25 1.26 0.26 0.38 0.41 0.38 0.23 -0.26 (loss) 0.38 -0.83 (loss) 0.37 0.23 0.36 -1.71 (loss) 0.34 0.26 0.36 last year this year a. For the exponential smoothing method, choose the first quarter of 3 years ago as the beginning forecast. Make two forecasts: one with a = 0.10 and one with a = 0.20. (Negative values should be indicated by a minus sign. Round your answers to 3 decimal places.) Company A Forecast a = 0.10 Forecast a= 0.20 Forecast a = 0.10 Company B Forecast a = 0.20 Quarter 1 3 years ago IV 2 years ago 1 II MI IV last year 1 II III IV this year 1 II 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 B a = 0.10 a = 0.20 b-2. Using the MAD method of testing the forecasting model's 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 a 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 Seasonal Factor Company B Seasonal Factor Quarter Forecast Forecast this year IV next year 1 Il III IV