Use the same business problem/opportunity and research variable you wrote about in Week 3. (this paper is attached)Remember: Do not actually collect any data; think hypothetically. Develop a 1,050-word report in which you: Identify the types of descriptive statistics that might be best for summarizing the data, if you were to collect a sample.Analyze the types of inferential statistics that might be best for analyzing the data, if you were to collect a sample.Analyze the role probability or trend analysis might play in helping address the business problem.Format your assignment consistent with APA guidelines
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Running Head: Assignment
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Lacie Courson
Institutional affiliation
March 13, 2017
Assignment
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Business name and description
The business name of the company am interested in and familiar with is Loanstar Title Loans.
The business is located in one of the busiest cities in the United States of America in taxes city.
This company falls under the banking industry but it has majored its goal in lending out finances
to the financial needy Americans within and without Texas City. The financial institution was
founded in the year 1990 in Jonesboro. It’s one of the America’s most respected financial
company which fundamentally helps the financial needy Americans to use the equity and aces
the cash they need. The financial system in most banks in Texas City has improved significantly
over the last decade making it one of the best and largest in America. Therefore, Loanstar is in
the group of the most leading and best financial institution in the United States, which offers
extends credits to its esteemed customers.
Problem statement.
Loan defaults are usually one the major setbacks to the growth of financial institutions in the
region despite their sizes and nature. Loan default rates are used to signify a financial distress to
the financial banks that take place as a result of defaults in the repayment of loans by financial
institutions. Loan defaults lead to situations where the commercial banks are confronted with a
temporary lack of liquidity and with difficulties that ensue in fulfilling financial obligations on
schedule and to the extent. Banks are financially distressed when they are technically insolvent
or illiquid. The major sources of the revenue for most financial institutions is the customer credit
and the finance cost they pay as they make their loan repayments. Therefore, most financial
institution’s failures are caused by the non-performing loans. Bad debts which are born by the
Assignment
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default loans are attributed by the moral hazards which include adverse incentives on financial
institutions managers to adopt imprudent lending techniques on specific insider lending. The
riskiest segment of credit markets is lending at high-interest rates. This effect has drawn more
attention to me with the urge and motivation to carry a research in order to help Loanstar title
loans cut on what has been a rising trend of loan defaults across the industry. Most local studies
have focused on factors causing loan defaults in the financial institutions in the economy of
America. There has been no known study focusing on the relationship between techniques of
management of loan defaults and their effects on the financial performance of the financial
institutions in Texas City, America. This study, therefore, seeks to fill this gap of knowledge by
analyzing the relationship between effects of loan default rates and its effects on the financial
performance of the financial institutions (Abramson & Abramson, 2008).
From the stated problem has some specific variable that could be used in the study. The problem
tries to address the research variable of the effect of the loan default rates on the financial
performance in Loanstar Tittle Loans.
Methods of collecting data.
The key primary method of collecting the data we require for this study would be the use of the
secondary data. Secondary data may be defined as the data has already been collected by other
individuals or researchers and is readily available in other sources. Secondary data will be used
for the purpose of this study and the data will be derived from the financial statements of
Loanstar title loans. The financial statements that will be used include the statement of
comprehensive income and the statement of financial position of the financial institution.
Another data which will be useful for this study will be the data from the central bank of the
United States (Abramson & Abramson, 2008). Another method that will be suitable for this
Assignment
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study is the primary method of data collection. Primary data collection method is the process of
getting the raw data directly from the source without the use of the already collected data. Under
the primary data, there are specific methods that can be used to derive the data which will be
useful in this study. The most appropriate primary data collection method for this study is the use
of questionnaires. Questionnaires are important tools for data collection as they justify the reason
that they provide an effective and efficient way of gathering information within a short period of
time. In addition, questionnaires facilitate easy coding and analysis of the data collected. The
best way to administer the questionnaires is by use of the closed and open-ended questions. This
is vital because closed-ended questions ensure that the respondents are restricted to certain
categories in their responses while open-ended questions provided an insight of new ideas
(Neuman, 2002)
The data will be subjected to checks about accuracy and completeness of recording of the
responses, later it will be coded and checked for coding errors and omissions. Both quantitative
and qualitative data analysis techniques will be very important and need to be used for this study
because both approaches complemented each other. Quantitative data analysis included
descriptive statistics. Descriptive data analysis will be done by use of measures of central
tendency which include frequencies, means, variances, percentages and standard deviation.
Qualitative data will be analyzed through the comparison of the responses and merging of those
which are alike usually in a textual or narrative form. To present the information, frequency
tables, charts, graphs, words, and figures will be necessary to give a clear understanding and
interpretation of the data collected.
The reason why the secondary data will be important is because it will help in the calculation of
the return on equity. Return on Equity (ROE) is generally calculated as annual net income after
Assignment
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tax divided by shareholder’s equity as a measure of financial performance. Financial
performance will definitely tell how Loanstar title loans are doing in terms of the loan default
rate. In case the loan default rate is increasing the financial performance is expected to drop. In
addition that return on the shareholder’s equity is calculated to see the profitability of owner’s
investment (Neuman, 2002). It indicates how well the firm has used the resources of its owners.
The ratio reveals the relative performance and strength of the company in attracting future
investment. ROE is an all-embracing ratio that relates net income to the level of investment. It is
generally easily understood by all levels of management. Lastly, the primary data would be
reliable in that it will use questionnaires that are restricted to a specific area of interest. This will
enable the study to develop the data which is only important in the study contest. This will also
help save time and do the right statistical analysis and we will be able to make an informed
conclusion and recommendation for the study (Hair, Anderson, Babin, & Black, 2010).
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Assignment
References
1. Abramson, J. H., & Abramson, Z. H. (2008). Methods of collecting data. Research
Methods in Community Medicine: Surveys, Epidemiological Research, Programme
Evaluation, Clinical Trials, Sixth Edition, 143-150.
2. Simons, Geoff. “Systems and methods for collecting data and measuring user behavior
when viewing online content.” U.S. Patent Application 11/290,149, filed November 30,
2005.
3. Hair, J. F., Anderson, R. E., Babin, B. J., & Black, W. C. (2010). Multivariate data
analysis: A global perspective (Vol. 7). Upper Saddle River, NJ: Pearson.
4. Neuman, L. W. (2002). Social research methods: Qualitative and quantitative approaches.
…
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