Concurrent Deviation Method
^{AIM:}
^{ }To test relationship between current ratio and return on total assets of X Ltd for the period 200611.
NULL HYPOTHESIS (H_{0}):
There is no significant relationship between current ratio and return on total assets of X ltd for the period 200611.
ALTERNATIVE HYPOTHESIS (H_{1}):
There is no significant relationship between current ratio and return on total assets of X ltd for the period 200611.
YEARS

CURRENT RATIO (X)

DX

RETURN ON TOTAL ASSETS( Y)

DY

DXDY

200506

5.01


7.02



200607

3.27



5.02



+

200708

3.21



7.80

+



200809

2.65



4.88



+

200910

2.56



7.17

+



201011

3.04

+

9.6

+

+

Total





C=3

TABLE NO: 4.2.2 Calculation of correlation coefficient between current ratio and return on total assets of X Ltd for the Period 200511
Concurrent deviation method :
Rc = ±√±(2Cn)/n
Rc = ±√±(2(3)5)/5
Rc = ±√±.2
Rc = +0.45
Student's tdistribution:
t = r X √(n  2)
√(1(r^{2 }))
t = 0.45/√ (1(0.45)^{2} * √ 62
t= 1.008
Degree of freedom(dof) = n2
= 62
= 4
Level of significance = 5%
Table value(t_{4 }0.05) = 2.571
Result:
Since the calculated value of t(1.008) is less than the table value of t(2.571) m, the Null hypothesis is accepted .
Decision:
There is no significant difference between current ratio and return on total assets of X ltd for the period 200610.