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FINC-780 Assignment 1
Effect of Financial Crisis on Corporate Profits Concept: Most data science projects, at a very minimum,
involve answering “what is/was…” type questions using data. Sometimes, these questions are
generated in an exploratory mode, while at other times, the questions are more formally posed by
business or other entities. There are simple ways to answer questions using visualization or tabulation
and without resorting to advanced statistical analysis. In this project, you will use tabulation to
answer some real-world data questions. You will showcase your ability in using dataframes and in
using packages such as dplyr and data.table. You will also showcase your ability to report results of
a data project using Markdown. Requirements: You are provided with a csv file containing annual
financial data for firms. Three important columns: fyear = fiscal year; tic = firm ID, ni = net income.
Using this information, you shall answer the following questions and the other requirements that
follow the questions: 1. Overall, what is the effect of the crisis in financial terms? You can answer
this by calculating the percent by which average annual net income decreases for
firms during crisis years (2007-8) compared to pre-crisis years (2004-6). 2. What are
the 10 firms with the largest and smallest changes respectively? List results for absolute
change and percent change separately. 3. How long does it take for firms to recover from the crisis?
You can follow the following algorithm. For each firm in the sample, identify the highest Net Income
in the pre-crisis period. Focusing now on the post-crisis period of 2009-14, identify when this highest
level was breached and set the variable ‘YearsRecover’ equal to the difference between year level
breached and 2008. If the highest level was not breached, set ‘YearsRecover’ to NA. Summarize
this information in a table. Show key steps in your work and be sure to demonstrate proficiency in dplyr
or data.table or both. Also, produce a data-supported overall conclusion concerning the effect
of the crisis on corporate profits. Use Markdown skills to format the report appropriately. Recall
that a formal report has components such as introduction, body, and conclusion, and is labelled and
formatted appropriately. Submission: pdf with pages <= 8.