The data in the table show the liquidity, size and profitability of various Philippine firms across the years.

1. You wanted to test a three-variable regression model with liquidity as the regressand. Write your mathematical model.

2. What are your null hypotheses (in English and mathematical notations)? Do you accept them or reject them?

3. Interpret the regression. Does it make financial sense? Support your explanation with theories.

4. What percent of the total variation of your regressand can be explained by your SRF? Do you think this is a good model to explain the variation of the regressand?

Based on your answer in item 3, how can you revise your model to increase the percentage it can explain in the variation of the regressand? (Hint: See Uyar and Kuzey (2014)[1] and assume that liquidity can be proxied by corporate cash holdings

[1]Uyar, A. & Kuzey, C. (2014). Determinants of corporate cash holdings: evidence from the

emerging market of Turkey. Applied Economics, 46:9, 1035-1048, DOI: 10.1080/00036846.2013.866203