Factor Analysis Interpretation 7.2.16

8/17/2019 Factor Analysis Interpretation 7.2.16

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AFACTOR ANALYSIS

Factor analysis is a technique which helps to reduce the number o !ariables and also to detect

structure in the relationships between !ariables" that is to classiy !ariables# Thus actor analysis

is applied as a data reduction or structure detection method $the term actor analysis was irst

introduced by Thurstone" $%&'%(#

In order to test the !alidity o the data or actor analysis )*O $)aiser *eyer Ol+in ( and

,artlett-s test o Sphericity was conducted# This test is an indicator to +now how well the sample

data is suited or actor analysis# It is the ratio o the sum o the squared correlations or all

!ariables in the analysis to the squared correlations o all !ariables plus the sum o the squared

partial correlations or all !ariables# The denominator o this ratio increases with the !ariation

that is unique to pairs o !ariables $partial correlations(" ma+in. the !alue o )*O less than one#

These measures su..est that !alues o /#& or hi.her are .reat and !alues below /#0 are

unacceptable# The use o )*O and ,artlett-s test o sphericity is essential to measure sample

adequacy or usin. actor analysis#

KMO AND BARTLETT’S TEST

)aiser *eyer Ol+in *easure o Samplin.

Adequacy

/#10&

,artlett-s test o Sphericity Appro2# Chi3Square %'0#4/5

6F %/

Si. #///

The actor analysis is used to study the problems aced by *S*7s in 8isa+hapatnam district#

These problems are studied in i!e areas#

%# Finance 9roblems

:# 9roduction 9roblems'# *ar+etin. problems

;# *ana.erial problems

0# 9re < Commencement o business 9roblems

Finance problems contains %0 !ariables" 9roduction problems contain our sub problems namely

Raw *aterial" 9ower" labour and Technolo.y# On the whole %1 !ariables are co!ered in all the


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our sub problems# %% !ariables are co!ered in mar+etin. problems" 0 !ariables are co!ered in

mana.erial problems and 1 !ariables are co!ered in 9re3Commencement o business problems#

=ence on the whole 00 !ariables are co!ered in i!e areas#

00 !ariables were run into S9SS sotware and the results showed only '' !ariables# >hich are as

ollows?

I Finance 9roblems?

%# @rant o loan $@L(:# 6ocumentation $6(

'# Security $S(

;# *aintain boo+s o accounts $*,A(0# ,ud.etin. $,(

5# 9ayment o 8AT $8(1# 9ayment o CST $C (4# 9ayment o 72cise duty $76(

9ayment o Custom duty $C6(

%/# 9roblem or claimin. Input Ta2 Credit $ITC(%%# Factorin. $F(

%:# Allowin. credit to customers $ACC(

%'# Slow collection o debts $SC6(

%;# @rant o subsidy $@S(%0# =i.h discount allowed $=6A(

II 9roduction 9roblems?

$i( Raw *aterial?%# Shorta.e o a!ailability o Raw *aterial $SR*(

:# =i.h cost o Raw *aterial $=R*(

'# Increase in orderin. cost due to less quantity ordered $OC(

;# Import o Raw *aterial $IR*(0# 9roblems in stora.e o Raw *aterial $STR*(

$ii( 9ower 9roblems?

%# 9ower cut $9C(:# =i.h cost o alternate power $diesel or .enerator( $A9(

'# 9ower holiday $9=(;# =i.h e2penditure on power consumption $79C($iii( Labour 9roblems

%# =i.h cost o s+illed labour $=SL(

:# Non a!ailability o s+illed labour $NASL('# Frequent absenteeism o labour $FAL(

;# *ore idle time spent by labour $ITL(

$i!( Technolo.y 9roblem?


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%# Non A!ailability o *achinery $NA*(

:# Bnder utiliation $BB(

III 9re3 Commencement o ,usiness 9roblem?

%# See+in. permit rom en!ironment department $S976(:# Re.istration $R(

'# Ta2 related problems $T9(

Communalities

Initial Extraction

grant 1.000 .770

documen 1.000 .836

security 1.000 .747

books 1.000 .793

budget 1.000 .784

vat 1.000 .898

cst 1.000 .962

excise 1.000 .943

cusdut 1.000 .90

in!utax 1.000 .860

"acting 1.000 .823

cretoc 1.000 .811

slo#det 1.000 .927

subsidy 1.000 .807

$ig$dis 1.000 .63

s$orage 1.000 .99

$ig$ct 1.000 .801

ording 1.000 .860

im!orrm 1.000 .76

storarm 1.000 .740

!o#cut 1.000 .843

altertiv 1.000 .96

$oliday 1.000 .882

$ig$ex! 1.000 .901

skilled 1.000 .916

nonaval 1.000 .900

absent 1.000 .993

idltime 1.000 .801


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navimac 1.000 .872

under 1.000 .821

over 1.000 .784

72traction *ethod? 9rincipal Component Analysis

TOTAL VARIANCE EXPLAINED

Componen

t

Initial 7i.en !alues 72traction Sums o Squared

Loadin.s

Rotation Sums o Squar

Loadin.s

Total

D o

8arianc

e

Cumulati!

e D Total

D o

8ariance

Cumulati!

e D Total

D o

8ariance

Cumul

D

%10.230 28.416 28.416

10.23

028.416 28.416 6.047 16.797 1

: 4.322 12.006 40.422 4.322 12.006 40.422 4.616 12.822 2

' 3.70 10.416 0.839 3.70 10.416 0.839 3.783 10.09 4

; 2.460 6.832 7.671 2.460 6.832 7.671 3.414 9.483 4

0 2.09 .718 63.389 2.09 .718 63.389 2.996 8.321

5 1.676 4.6 68.044 1.676 4.6 68.044 2.421 6.726 6

1 1.72 4.366 72.410 1.72 4.366 72.410 1.72 4.867 6

4 1.497 4.18 76.69 1.497 4.18 76.69 1.71 4.763 7

& 1.273 3.37 80.106 1.273 3.37 80.106 1.416 3.932 7%/ 1.08 2.938 83.044 1.08 2.938 83.044 1.398 3.883 8

%% 1.014 2.81 8.89 1.014 2.81 8.89 1.32 3.7 8

%: .86 2.378 88.237

%' .688 1.911 90.148

%; .617 1.714 91.862

%0 .466 1.294 93.16

%5 .403 1.120 94.276

%1 .341 .947 9.223

%4 .291 .807 96.030

%& .21 .697 96.727

:/ .232 .64 97.372:% .19 .42 97.914:: .13 .426 98.341:' .128 .3 98.696:; .121 .337 99.033


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:0 .098 .272 99.304:5 .083 .231 99.3:1 .04 .149 99.684:4 .041 .113 99.797:&

.024 .067 99.864'/ .022 .061 99.92'% .01 .043 99.968': .007 .020 99.987

33 .004 .012 99.999

34 .000 .001 100.000

3 %2.661E%

16

%7.392E%

16100.000

36 %7.634E%

16

%2.121E%

1100.000

72traction *ethod? 9rincipal Component Analysis

In order to reduce the number o actors and enhance the interpretability" the actors were rotated#

Since the rotation increases the quality o interpretation o the actors# Thou.h there are !arious

methods or rotation in order to obtain simple structure o the data# The !arima2 rotation is one

such method which is used in order to obtain better result or interpretation which is show in the

below table#

TA,L7 %?

ROTATED FACTOR LOADINGS

S.No

VARIABLES

FACTOR

CO*

*B

NA

LIT

Y

% : ' ; 0 5 1 4 & %/ %%

inance#%%% #/';

3#/%

%

3#/1

/#/'4

3#::

'

3#%:

1

3#%'

5#/&: 3#44;

#

%1:

#

&:'


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prodion 3#//

5

3#%4

4

3#//

%#%%:

3#/5

0

3#/'

:#/%;

3#5:

;#'1/ #;'&

#

'4&

#

&:0

mar+etin

.#//; #/:&

3#/'

;

3#%/

;

3#/%

'#%5% #/00

3#/;

4#'/4 #%5&

3#41

'

#

&'%

mana.e

m

3#/0

/#%'% #/5% 3#/%

1#//& #/&: 3#/:

5#//0 3#441 #/15 #

:00

#

4&/

precomm 3#/5

0#//&

3#/%

%#/4; #/'4

3#//

%#/45 .898 #/;0 #%45

#

%/'

#

41;

.rant#%:4

3#/&

:.810 #/:/ #%%% #%;; #/45 #/00 3#/%% 3#:%/

#

/';

#

11/

documen#%0% #/%5 .870 #%;0 #/&/ #%'' #/51 #/%1 #//0 3#/;%

3#/;

&

#

4'5

security#%:: #%1& #%0;

3#:&

/

3#;5

5#;5%

3#%'

;#:45 #:%; 3#%:1

#

/%&

#

1;1

boo+s#%%: #/:4 .792 #/;1 #%15

3#:'

%

3#/5

5

3#/1

13#/0' #::&

#

/:%

#

1&'

bud.et#;54 #/'' .549 #/5% #'4& #/1&

3#/0

&

3#%4

%3#%50 #%5%

#

%/;

#

14;

!at.897 #/5' #%%0 #%40 #/&' #/%' #/%0

3#/&

&3#/'' 3#%/;

3#%/

;

#

4&4

cst.920 #%/0 #%'/ #%41 #:%:

3#/%

1#/%'

3#/:

'3#/00 3#/01

3#/'

'

#

&5:

e2cise

.99 #/'4 #/;0 #%0' #%0:

3#/5

4

3#/;

;

3#//

& #/00 3#/::

#

/'5

#

&;'

cusdut.942 #/;' #/0% #%0& #%0:

3#/;

'

3#/5

&

3#//

4#/0' 3#/:1

#

/%5

#

&0/

inputa2.848 #%/: #/&5 #:4'

3#/&

'

3#/;

:

3#%/

5#/4' #/10 #/':

#

/1'

#

45/

actin.#'4' #%&1 #;50 #''% #/15 #'%' #'1'

3#/'

03#%;0 #%;;

#

%5%

#

4:'

cretoc#':/ #/:4 #/&1 .804 #/&0

3#/'

&

3#/'

5

3#%/

4#/;' #%50

3#//

'#4%%

slowdet#'%/ #/;; #/&/ .884 #%50 #/:0

3#/%

:

3#/0

%#/'; #/;%

#

/1%

#

&:1

subsidy#:4: #/// #/04 .!9 #:%: #%;: #//5 #'%5 #/45 #/;:

#

:5;

#

4/1

hi.hdis#'&: #/5& #/0& .!14

3#/:

0

3#%/

0#/:& #%%4 3#%44 3#%'&

3#%:

:

#

5'0

shora.e .725 #/5& .507 #;%: #%4; #/:1 #/:% #//' 3#/:& #/%% # #


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/;' &&0

hi.hct#:%' #%;0 #:'5 .525 .!02 #/'4 #/51

3#/:

;#%/' 3#%0;

3#/%

4

#

4/%

ordin.#'/1 #%5% #%&: #%;5 .759 #:%0 #//5 #/;1 3#%4/ 3#%0%

3#/;

'

#

45/

imporrm#//:

3#/;

5

3#'1

%#/&0

3#/;

1#:0:

3#51

;

3#%5

4#%;5 3#/0'

#

%44

#

105

storarm#;// #%&4 #'%/ #/:% .!14 #%:% #/15 #/;0 #/1' #%1:

#

/&5

#

1;/

powcut 3#/1

1#:&: .547 #/&: #;50

3#/'

%#%55 #'4% #:'/ #//5

#

/'%

#

4;'

alterti!#:5& #:4: #'4' #:5% .74 #%%; #/14 #%0' #/41 3#/%1

#

///

#

&05

holiday 3#/&

%.910

3#//

'#%5: #/11

3#/1

1#/%:

3#/:

53#//4 #/'%

3#/1

1

#

44:

hi.he2p#/:& .887 #%'1

3#%:

'#%&1

3#/'

4

3#/;

/#%/5 3#/'& 3#/::

#

%0;

#

&/%

s+illed#%0: .88!

3#%1

&#%:&

3#/%

/#%/& #/:4 #//0 #/'4 #/;1

3#:/

0

#

&%5

nona!al#:%5 .892 #%/'

3#/;

/#/0;

3#/1

0#/;& #/%& 3#%%& 3#%/5

#

/&/

#

&//

absent#/&/ .98! #/%1 #/'; #/45

3#/:

'#/%0 #/:4 3#/'1 3#/%5

3#//

&

#

&&'

idltime 3#/&

'

3#/;

1#/;/ #%0;

3#/0

'.82 #%:% #/:& 3#/&4 #%%%

3#%4

:

#

4/%

na!imac 3#/;

;

3#%%

'#%/:

3#/&

'#'5% .80 #/0;

3#/:

4#/%1 #%%:

#

/0;

#

41:

under 3#/;

'

3#/:

5

3#%0

1

3#%;

/#:14 .51 .599

3#/&

;3#%1' #/4'

3#%/

%

#

4:%

o!er 3#%;

/#/:% #//; #/&' #//& #:;/ .805 #/;/ #%&& #/0%

#

/4/

#

14;

E"#$"

V%&'$

10.2

0

4.2

2

.75

0

2.4!

0

2.05

9

1.!7

!

1.57

2

1.49

7

1.27

%#/0

4

%#/

%;

( o)*%+,%"-$

28.41!

12.00!

10.41!

!.82

5.718

4.!55

4.!!

4.158

.57

:#&'4

:#4%0

C' (

o)

*%+,%"-$

28.4

1!

40.4

22

50.8

9

57.!

71

!.

89

!8.0

44

72.4

10

7!.5

!9

80.1

0!

4'#/

;;

40#

40&

72traction *ethod? 9rincipal Component Analysis#

Rotation *ethod? 8arima2 with )aiser Normaliation#

Rotation con!er.ed in %/ iterations#


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TABLE 2/

CLSTERING OF VARIABLES INTO FACTORS

FACTOR 8ARIA,L7S ROTAT76 FACTOR LOA6IN@

% 8AT /#&'4

CST /#&/4

72cise duty /#&:'

Custom duty /#4&%

@rant o subsidy /#15%

: *aintain boo+s o accounts /#10;

9ower cut /#4%1

9ower holiday /#4%/

=i.h e2penditure on power consumption /#55&

9re3commencement ta2 related problems /#54'' @rant o loan /#41&

6ocumentation /#4%%

Allowin. credit to customers /#111

more idle time spent by labour /#0&0

; =i.h cost o s+illed labour /#4%%

Non < a!ailability o s+illed labour /#&/0

Frequent absenteeism o labour /#455

0 Shorta.e o Raw *aterial /#14%

Increase in orderin. cost /#1':

9roblem in stora.e o Raw *aterial /#0%/

5 =i.h cost o alternati!e power /#4511 =i.h cost o Raw *aterial /#5'5

Non < a!ailability o *achinery /#55&

4 9roblem or claimin. Input ta2 credit /#1:1

& Re.istration /#0:&

TABLE /

SMMAR OF FACTORS

Factor Factor loadin. mean Ran+in.

Factor % /#44;: %

Factor : /#1;55 0

Factor ' /#1500 ;

Factor ; /#45/5 '

Factor 0 /#51;' 1

Factor 5 /#451 :


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Factor 1 /#50:0 4

Factor 4 /#1:1 5

Factor & /#0:& &

A /#0/ actor loadin. was used as a cut3o point" thereore the sur!i!in. !ariables with actor

loadin.s o /#0/ or hi.her are considered urther or interpretation and namin.# The

interpretation and namin. o actors implied that the remainin. or sur!i!in. !ariables with hi.h

actor loadin.s and common conceptual meanin.s were .rouped to.ether to orm a .enuine

independent actor#

Table % pro!ides summary o rotated actor patterns# Ater the .roupin." namin. and

interpretation" & newly established actors were identiied and are considered to be si.niicant

actors that inluence the selection o problems aced by *S*7 sector#

Factor %? actor % accounts or ::#%0 percent o the total !ariance and is deri!ed rom si2

!ariables" namely? bud.et $/#0:&(" 8AT $/#&'4(" CST $/#&/4(" e2cise duty $/#&:'(" Custom 6uty

$/#4&%( and problem relatin. to @rant o Subsidy $/#15%(# All these !ariables reer to inancial

problems" hence o all the i!e problems studied by the researcher it is ound rom the analysis

that *S*7 are acin. inancial problems# This actor ran+ed % as shown in table '#

Factor :? actor : accounts to %5#';4 percent o the total !ariance and is deri!ed rom i!e

!ariables" namely maintenance o boo+s o accounts $/#10;(" power cut $/#4%1(" power holiday

$/#4%/(" hi.h e2penditure on power consumption $/#55&(" ta2 related problems beore

commencement o business $/#54'(# O all the !ariables in actor :" problems relatin. to 9ower

are playin. a maEor role# =ence problem relatin. to power is a actor which *S*7s are acin.#

It is ran+ed 0#

Factor '? actor ' accounts to %%#05; percent o the total !ariance and is deri!ed rom our

!ariables" namely? .rant o loan $/#41&(" problems relatin. to documentation $/#4%%(" allowin.

credit to customers $/#111( and more idle time spent by labour $/#0&0(# O all the our !ariables"

three o the !ariables are relatin. to Finance problems and one !ariable is relatin. to Labour

problems# It ran+ed ;#


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Factor ;? Factor ; accounts to %0 percent o the total !ariance and is deri!ed rom three

!ariables" namely? hi.h cost o s+illed labour $/#4%%(" Non3a!ailability o s+illed labour $/#&/0(

and requent absenteeism o labour $/#455(# All the three !ariables are representin. the 9roblems

relatin. to labour# It shows that *S*7s are seriously acin. 9roblems relatin. to labour# It

ran+ed '#

Factor 0? actor 0 accounts to 5#1%1 percent o the total !ariance and is deri!ed rom three

!ariables" namely? shorta.e o Raw *aterial $/#14%(" Increase in orderin. cost due to less

quantity ordered $/#1':( and 9roblem in stora.e o Raw *aterial $/#0%/(# All the three problems

are relatin. to Raw *aterial problem# It shows that the *S*7s are not only acin. problems

relatin. to inance and Labour but also problem relatin. to Raw *aterial# It is ran+ed 1#

Factor 5? actor 5 accounts to 0#;;; percent o the total !ariance and is deri!ed rom only one

!ariable" namely =i.h cost o alternati!e power $/#451(# This !ariable is represents the problem

relatin. to power# 9roblem relatin. to power has our !ariables out o which three !ariables were

deri!ed in actor : and the remainin. one !ariable is deri!ed in actor 5# It is ran+ed :# This

shows that ater Finance as shown in table '" 9ower plays a maEor role in the problems aced by

*S*7s#

Factor 1? actor 1 accounts to ;#/&4 percent o the total !ariance and is deri!ed rom two

!ariables" namely =i.h cost o Raw *aterial $/#5'5( and Non3a!ailability o *achinery $/#55&(#

O these two !ariables one !ariable is relatin. to Raw *aterial 9roblem and the other !ariable is

relatin. to Technolo.y problem# This actor ran+s 4#

Factor 4? actor 4 accounts to ;#/11 percent o the total !ariance and is deri!ed rom only one

!ariable" namely? problem or claimin. input ta2 credit $/#1:1(# This !ariable is relatin. to

inance problem# Factor 4 ran+s 5 position in problems o *S*7s#

Factor &? this actor accounts to '#%54 percent o the total !ariance and is deri!ed rom only one

!ariable" namely? Re.istration beore commencement o business $/#0:&(# This !ariable is only

one !ariable which is relatin. to 9re3commencement problems# It ran+s &th position#

Co"-&',o"/


11/12

The main indin.s o the study ha!e .enerated some important actors relatin. to problems aced

by *S*7s in 8isa+hapatnam district o Andhra 9radesh# It concludes that Finance is a maEor

problem aced by these enterprises which is deri!ed in actor %# All the inance related !ariables

are e2tracted under actor %" namely? problems relatin. to bud.et" 8AT" CST" 72cise duty"

Custom duty and .rant o subsidy# 6ue to lac+ o unds they are unable to meet their required

bud.et" unable to pay !arious ta2es and also unable to obtain subsidy rom the .o!ernment#

=ence the study re!ealed that Finance is the maEor actor which these sectors are acin. with#

The second hi.hest problem aced by these enterprises is relatin. to power# It is deri!ed in actor

5 which is ran+ed has the second position# The !ariable deri!ed in this actor is hi.h cost o

alternati!e power# The use o alternati!e power arises since there is acute power cut" power

holiday and hi.h consumption o power# All these three !ariables are deri!ed in actor :# This

shows that all the !ariables relatin. to power are clustered in actor : and actor 5# It means that

*S*7s are acin. serious problem relatin. to power" which is in turn aectin. their production#

The third hi.hest problem aced by these enterprises is relatin. to labor# It is deri!ed in actor ;

which is ran+ed '# The !ariables deri!ed in this actor are hi.h cost o s+illed labor" non3

a!ailability o s+illed labor and requent absenteeism o labor# All these three !ariables are

representin. the problem relatin. to labor# =ence it is pro!ed that *S*7s are acin. problems

relatin. to labor" which in turn aects their production#

Factor ' is ran+ed as ;th# The !ariables deri!ed in this actor are problems relatin. to .rant o

loan" documentation" allowin. credit to customers and more idle time spent by the labor# The

irst three !ariables are representin. the inance problems and the ourth is representin. the labor

problem# It shows that actor ' also is relatin. to inance and labor problems#

Factor 0 is ran+ed as 1th position# The !ariables deri!ed in this actor are shorta.e o Raw

*aterial" Increase in orderin. cost and problem in stora.e o Raw *aterial# This shows that the

ourth problems aced by these enterprises are relatin. to Raw *aterial" which in turn aects the

production#

Factor 1 is ran+ed as 4th position# The !ariables deri!ed in this actor are hi.h cost o Raw

*aterial and Non3a!ailability o *achinery# The irst !ariable is representin. the problem


12/12

relatin. to Raw *aterial and the second !ariable is representin. the problem relatin. to

technolo.y# The technolo.y problem also aects the production#

Factor 4 is ran+ed as 5th position# The !ariable deri!ed in this actor is problem or claimin.

Input ta2 credit# This !ariable is also representin. the problem relatin. to ianc#

Factor & is ran+ed as &th position# The !ariable deri!ed in this actor is Re.istration# This !ariable

is the only !ariable which is representin. the problem relatin. to pre3commencement o business#

From the abo!e indin.s it can be concluded that thou.h the researcher has conducted a study on

i!e areas o problems namely" inance" production" mar+etin." mana.ement and pre3

commencement o business# The results pro!ed that the *S*7s in 8isa+hapatnam district are

acin. to maEor problems# %# Relatin. to Finance and :# Relatin. to 9roduction# In 9roduction

the maEor problem aced by them are relatin. to power and ne2t is relatin. to labor and then

comes the problems relatin. to Raw *aterial and a minor problem relatin. to technolo.y# The

other three problems o the study are not disclosed in the analysis# It means that *S*7s are not

acin. any problem relatin. to mar+etin." mana.ement and pre3commencement o business# So

Finance is the maEor problems and ne2t is the 9roduction problems# In production the maEor

problem aced by these enterprises is relatin. to power and then comes the problem o labor and

the then the problem o raw material#

Documents

Factor Analysis Interpretation 7.2.16