Create a scatter plot between sales and ad spend

Problem Statement

The data shown in the data tab contains info on ad spend vs. sales revenue. Create a scatter plot between the two variables and conclude this exercise.  The data is given in the attachment.

How to perform analysis

Step 1: Open Sigma Magic

1. Click on the Sigma Magic button on the Excel toolbar.
   
2. Click on the New button to create a new project.

Step 2: Data Preparation

1. Open the Sales vs Advertisement.xlsx attachment
   
2. Select the data and convert it to table format by clicking on Ctrl-T.
   

Step 3: Add the analysis template

1. Click on the Tool Wizard to add the analysis template.
   
2. Click on Graph and then Scatter Plot.
   

Step 4: Specify analysis options

A new Scatter Plot worksheet will be added to your workbook, and the following dialog box will be opened. Click on the Setup tab on the right. Accept the default values and specify the analysis options.

Next, click on the Data tab and specify the data. Drag and drop the Table1 Ads to the Y Variable; Table 1 Sales to the X Variable and Table1 Group to the Group Variable.

If you need to make changes to the charts, specify the optional settings in the Charts tab.

 Labels:

• Add a title for the chart.
• Label the X-axis and Y-axis appropriately.

Appearance:

• Adjust colors, font sizes, or other visual elements as needed.
• Enable/disable gridlines or background shading.

Finally, click the Verify tab to ensure all the inputs are okay and shown in a green checkmark.

Step5: Generate analysis results

Click on the OK button to generate analysis results. The following figure shows an example output screen.

Interpreting results

The following conclusion can be drawn from this analysis.

1. Strong positive correlation at 0.892 between spending on advertising and sales revenue
   
2. It accounts for about 79.5% of the variance (R-squared = 0.795).
3. Statistically significant relationship (p-value < 0.001)
4. This scatter plot shows a clear upward trend, suggesting that increased advertising spending generally leads to higher sales.

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