The application of discriminant analysis in determining the performance of the real estate development companies in the Philippines

• Main Authors: Cheng, Philbert, Co, Sheila Marie, Ngo, Darwin, Tongio, Sylvia
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Discriminant analysis; Multivariate analysis; Real estate development > Finance; Corporations > Real estate investments
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/16364
• Institution: De La Salle University

This study was made possible because of the twin interest that the group has developed in 1.) the area of real estate development and in 2.) the financial tool of Discriminant Analysis. It was very evident that in the past few years, the real estate industry has been booming. Due to this, the group was then convinced in knowing the underlying reason of the success of that industry specifically in the real estate development sector. The discriminant analysis is a financial tool which was seldomly used by researchers. Though it is not taught to the undergraduate students, the proponents wanted to explore the main usage of this analysis whether it can be proved to be useful in future studies. The advantage of using this analysis against linear regression is that the dependent variables can be categorized. In general, the discriminant analysis is a very useful tool: 1.) for detecting the variables that allow the researcher to discriminate between different groups. 2.) for classifying cases into different groups with a better than chance accuracy Using this information, our group estimated the relationship of the status of the company whether they are performing below or above the average return on equity with the company's corresponding sales mix using the discriminant analysis. We assumed that the simple average of the return on equity of our respondents served as our industry average due to the unavailability of the data.