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Capella University *

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MBA FPX-50

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Business

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Feb 20, 2024

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Applying Analytic Techniques to Business Katie Butler Capella University Applied Business Analytics: MBA-FPX5008 Dr. Isabel Wan November 8, 2023 1

Business Context Sally Beauty is a global distributor and retailer offering professional quality products to both retail consumers and salon professionals. (Sally Beauty, 2022) Sally Beauty began as a single store in New Orleans, Louisiana, in 1964 by C. Ray Farber. The store was named after Farber’s daughter, Sally. Today, Sally Beauty is headquartered in Denton, Texas, and has over 4,800 locations across the United States, Puerto Rico, Canada, and some in Europe. The current Chief Executive Officer is Denise Paulonis. Sally Beauty’s purposes and values are dear to every associate’s heart. The company's purpose is the impact it intends to have in the world. The values are how the company lives up to its purpose. The values include the following: be yourself, be an inspiration, be bold, be an owner, and be part of something bigger. Sally Beauty has created a mission to create a culture that welcomes everyone by creating their diversity, inclusion, and belonging mission. The culture for that is called “One & All”. A SWOT analysis was done in Sally Beauty’s competitive analysis. Sally has many strengths that can give it a competitive edge. Among many is that Sally Beauty offers private label products. Many of the brands within the Sally stores are Sally-owned and manufactured, meaning they cannot be found nor purchased anywhere else. This is a great way to keep customer loyalty because it creates a one-stop shop for beauty needs. A weakness stems from one of the company’s strengths. While Sally Beauty has down many of the brands they offer, they also manufacture them. Unfortunately, this can often cause supply issues. A shortage of an ingredient will cause a product shortage, causing many stores and warehouses to be out of stock. No other manufacturer makes those products so that the stores could be out of it for a while. Sally Beauty has one great opportunity that helps keep that competitive edge. They offer an Associate Influencer program. This allows associates to post reviews on different social networks to spread the word about the product, and the associate can get paid for it. This is a great way to get product reviews out to the masses. Increasing labor costs can also affect Sally Beauty as a threat. The company employs more than 29,000 associates. The company has had to figure out ways to keep turnover low and associates happy while working at Sally Beauty. At the beginning of Fiscal Year 2023, Sally Beauty increased the starting pay for all associates by $3. This helped associates from looking for other places of employment, keeping associates employed longer, which is a better investment than constantly having to train new associates, potentially causing missed sales. The following data looks at Sally Beauty’s stock from November 1, 2022 to October 31, 2023. I will analyze the adjusted closing daily stock price and volume to determine how well 2

Sally Beauty has performed. I will also calculate the mean, median, mode, and standard deviation for the adjusted closing daily stock price and volume. Graphical Representations of Data 8/27/2022 12/5/2022 3/15/2023 6/23/2023 10/1/2023 1/9/2024 0 2 4 6 8 10 12 14 16 18 20 High Stock Price Each Day High Date D/M/Y Stock Price in USD The first data set here is for the high Sally Beauty stock prices each day. It was decided to create a scatter plot to represent the data. A scatter plot shows relationships between variables. To create a scatter plot, I input the data from Yahoo Finance into Excel. The columns for the dates and high stock prices were selected. Under the Insert heading at the top of the screen, the scatter plot option was chosen to create the chart. Excel populated the chart, and I edited the title and axis titles, also adding a legend. The Y-axis represents the stock price in United States Dollars, while the X-axis represents the dates. 8/27/2022 12/5/2022 3/15/2023 6/23/2023 10/1/2023 1/9/2024 0 5 10 15 20 Low Low Date D/M/Y Stock Price in USD 3

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This following data set also uses a scatter plot to represent the daily low Sally Beauty stock prices. Similarly to the prior graph, I used the data input from Yahoo Finance to create this graph. The columns for date and low were selected. Once selected, I chose the scatter plot graph under the insert heading. This populated the scatter plot for this graph. I did edit the title to reflect the data and the axis titles to reflect what each axis represents. The Y-axis represents the stock price in the United States Dollar while the X-axis represents the dates. I did add a legend to the graph. 5 10 15 20 More 0 20 40 60 80 100 120 140 160 180 Adjusted Closing Daily Stock Frequency Adjusted Closing Daily Stock Price Frequency The second set of graphs are both histograms. A histogram looks similar to a bar graph; however, unlike a bar graph, the bars do not touch. A histogram represents quantitative data. This Histogram represents the adjusted closing daily stock price for Sally Beauty. To create this first graph, I input the data from Yahoo Finance into Excel. Before actually creating the graph, I had to create and enter the bin numbers. Each bin is plotted as a bar whose height corresponds to how many data points are in that bin. (Khan Academy, 2023) I had to decide the width of the bins, and I chose to go by fives between bins. I entered the bin numbers in a separate column. Under the Data tab, I used Data Analysis and selected Histogram. I input the range required for the data into the input range and then input the bin range into the appropriate spot. I did choose an empty cell for the table to output into. I also selected Chart Output so the Histogram will automatically be created. I labeled the bins as Adjusted Closing Daily Stock Price and added a legend. 4

60000 1000000 2000000 3000000 4000000 5000000 6000000 7000000 More 0 20 40 60 80 100 120 140 160 180 Adjusted Closing Daily Stock Frequency Volume Frequency The second Histogram represents the number of shares traded in stock, called volume. Once again, I input data from Yahoo Finance into Excel to create this graph. I then entered bin numbers into a separate column to later be able to select during the graph-creating process. For this Histogram, the width of 20s was chosen for the bins. Under the Data tab, I used the Data Analysis tool to create the graph. I selected Histogram and input the range that included the data for the Volume data, then input the range for the Bins. I chose an empty cell for the table to output and then selected the Chart Output to create the Histogram. I labeled the Y-axis as Volume. Descriptive Statistics Formula Adj. Daily Closing Price Mean 12.35804781 Mode 12.22 Median 12.14 Standard Deviation 2.506233781 As requested, I calculated the mean, median, mode, and standard deviation of the adjusted daily closing stock price, as you can see above. I went to the Formula tab and selected More Functions to calculate the mean, the average of all the adjusted daily closing stock prices. Under that, I selected Statistical and then click on Average. After choosing the range I wanted the mean of, the Average was input into the appropriate cell in the table. To get the median was a 5

similar process. The median is the middle value in a set of data. I calculated the median by selecting the range that I wanted the median of. Then, I went to the Formula tab and chose More Functions to select Statistical and Median. The median then was output into the appropriate cell in the table. Mode is the value that appears most frequently in a set of data. This is calculated the same way as the mean and median. Selecting the data range in the spreadsheet and going into Formulas to choose More Functions then Statistical, mode will be found in the selection. The calculation will be input in the table. Lastly, in the table is the standard deviation of the data. Standard deviation measures the average distance from the mean value of all values in the set. This is calculated very similarly to the before-mentioned calculations. After selecting the data range needed, the standard deviation will be found under the Formulas tab, then More Functions and Statistical. There will be two options, single or population, and for this calculation, single was chosen. The calculation was output into the table. Function Volume Mean 1664876.494 Median 1471100 Mode 1238400 Standard Deviation 753610.7777 I also calculated the stock volume's mean, median, Mode, and standard deviation. I went to the Formula tab to calculate the mean and selected More Functions. I selected Statistical and then Average. I chose the appropriate range that I wanted to get the mean of; the calculation was input into the table. I selected the range I wanted to calculate to get the Median. I went to the Formula tab, then More Functions. From there, I chose Statistical and Median. The Median was then output into the table. To get the Mode of the data, I went into Formula again, chose More Functions, then Statistical, and chose Mode. I selected the range of data I wanted to get the Mode of, then calculated the data into the table. I then calculated the standard deviation of the data. I selected the data I wanted to calculate, went to the Formulas one last time, and then More Functions. I chose Statistical, then chose the standard deviation single, then calculated the data in the table. Conclusion Over the last year, Sally Beauty has had its share of highs and lows. Analyzing the data above can help make very informed decisions regarding investments and other financial decisions. Using tools such as the graphs above allows me to see a wide range of information on a small scale instead of trying to read all the data individually. The standard deviation allows us to see whether the investment is risky. The standard deviation determines if an investment will be risky or not. Right now, with a very high standard deviation, it is possible that the investment in the stock would be risky. 6

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References (n.d.). Purposes and Values . Sally Beauty Holdings Inc. https://www.sallybeautyholdings.com/our-company/purpose-and-values Sally Beauty Holdings Inc. SWOT Analysis. (2022). Sally Beauty Holdings, Inc. SWOT Analysis, 1–8. (n.d.). Histograms . Khan Academy. https://www.khanacademy.org/math/statistics-probability/displaying-describing-data/ quantitative-data-graphs/a/histograms-review#:~:text=A%20histogram%20displays %20numerical%20data,%22%2C%20or%20%22buckets%22 . Wathen, D.L.W.M.A. S. (2021). Basic Statistics for Business and Economics (10th ed.). McGraw-Hill Higher Education (US). https://capella.vitalsource.com/books/9781264086870 7

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