An accomplished Louisiana business executive and entrepreneur, Kirk Fisher has extensive management consulting experience that spans several years. As an executive in residence and MBA instructor at Louisiana State University, Kirk Fisher teaches his MBA students how to solve real-world problems using statistical approaches and methodologies such as regression analysis.

Regression analysis is a statistical method used in finance, investment, and other disciplines to investigate the relationship between a dependent variable (target) and an independent variable (predictor). A predictive modeling technique, regression analysis helps investment and financial managers to accurately value business assets and understand various variables are such as commodity prices and business stocks that relate to those commodities.

In regression analysis, the dependent variable is the main factor a business wants to understand or predict such as monthly sales while independent variables are factors a business knows could have an impact on the dependent variable. Business leaders can use regression to predict their sales trends. For instance, if sales are a dependent variable, factors that could influence future sales (independent variables) would include GDP (gross domestic product) growth, weather, market competition, and previous sales among other factors.

The relationship between variables is examined using a regression equation where coefficients represent the relationship between every independent variable and the dependent variable. Using regression analysis, business executives have an idea of business factors that matter the most, which ones can be ignored, and how these factors interact with each other.