Censored data & Truncated data
Censored data & Truncated data Censoring occurs when an observation or a measurement is outside the range and people don’ t know the certain value. The value is always above or below the range that people set. However, truncated data means that because of the limits, such as time, or space, people lose some data. Truncation is to cut off the data. In other words, we have collected and use the data, but the data is not in the range we have. It is called censored data. We don’t use the data because there are some emits, we don’t need to use and analyze the data, which is called truncated data.
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Examples: If I want to analyze the relationship between the sleeping hours per day and life span, I set the range of sleeping hours from 5 hours to 10 hours. If a person sleeps 12 hours a day, I will consider it is censored data because 12 hours’ data is not in the range. I will put this data into “over 10 hours”. Also, If a person only sleeps 3 hours, I will put this data into “below 5 hours”, and it is also censored data. If the US want to import eggs from China, the US has the strict range of eggs’ size.
This ratio measures the company’s liquidity and the features of the company’s scale. If working capital is less, it always means that the company is lack of turnover capital. TO = Retained Earnings / Total Assets. It reports the earning power of the company. The more retained earnings, the more power of paying dividends the company has. TO = Earnings Before Interest and Taxes (BIT)/ Total Assets. It recognizes operating earnings as being important to long-term viability. TO = Market Value of Equity / Book Value of Total Liabilities.
It reflects the financial structures. TO = Sales/ Total Assets. It is also known as “Total Assets Turnover”. If Z Score>2. 99, the company is in the “Safe” zone. That means the company have little probability to bankrupt. If Z- Score is between 1. 81 and 2. 99, the company is in “Grey’ zone. That means that the probability that the company will bankrupt within one year is 95%, while the percentage within two years is 70%. When the score is lower than 1. 81, the company is in “Distress” zone. The company has