Explanation

To determine the proportion of sales growth explained by the regression results, we calculate the R-squared (coefficient of determination).

Formula: $R^2 = \frac{SSR}{SST} = \frac{SSR}{SSR + SSE}$

Where:

• SSR = Sum of Squared Regression = 869.76
• SSE = Sum of Squared Errors = 22.12
• SST = Total Sum of Squares = SSR + SSE

Calculation: $SST = SSR + SSE = 869.76 + 22.12 = 891.88$ $R^2 = \frac{869.76}{891.88} = 0.975 \approx 0.98$

Therefore, 98% of the variation in sales growth is explained by the regression model, indicating a very strong fit.

Interpretation:

• R² = 0.98 means the model explains 98% of the variance in the dependent variable
• This is an excellent fit for a regression model
• The remaining 2% is unexplained variation (captured in SSE)