RESULT
Data analysis for Case A
A correlation coefficient study was carried out before start the DEA analysis. It is to screen out
not relevant input / output factors. There are 7 inputs and 2 outputs were involved. Table 3.1
showed the correlation of the input and output.
The result showed the coefficient between fixed asset and total asset is 0.98. It showed the effect
of these 2 factors on the output are the same. While comparing the R-square value between total
asset and fixed asset to the outputs, total asset gives higher R-square value. It means total asset
has higher correlation with the output factors. With this, fixed asset was not included in the
analysis.
The correlation between total liability and non-current liabilities is 1.0. Total liability has very
little impact on net income and revenue. It is because the major portion of the liabilities is the
non-current liabilities. Non-current liabilities did not play important role in generating revenue
and net income. In additional, the correlation coefficient between non-current liabilities and total
asset is 0.98. Thus, non-current liabilities and total liabilities were removed from the study.
Total expenses and current liabilities have 0.99 R-square values. But both of them are retained in
the study because it is a variable that the companies can play around.