What is a 'Residual Sum Of Squares  RSS'
A residual sum of squares (RSS) is a statistical technique used to measure the amount of variance in a data set that is not explained by the regression model. The residual sum of squares is a measure of the amount of error remaining between the regression function and the data set. A smaller residual sum of squares figure represents a regression function which explains a greater amount of the data.
BREAKING DOWN 'Residual Sum Of Squares  RSS'
It is not possible to draw conclusions about the correctness of the regression function solely using the residual sum of squares. Since a sufficiently complex regression function can be made to closely fit virtually any data set, further study is necessary to determine whether the regression function is in fact useful in explaining the variance of the data set. Typically, however, a smaller residual sum of squares is ideal

Nonlinear Regression
A form of regression analysis in which data is fit to a model ... 
Least Squares Method
A statistical technique to determine the line of best fit for ... 
Residual Interest
1. A charge for borrowing money that accrues on a credit card ... 
Residual Equity Theory
An accounting concept that says that common stockholders take ... 
Residual Interest Bonds  RIBS
A type of inverse floatingrate bond created by dividing the ... 
Variance Inflation Factor
A measure of the amount of multicollinearity in a set of multiple ...

Trading
Valuing A Company Using The Residual Income Method
Learn the underlying basics behind the residual income model and how it can be used to place an absolute value on a firm. 
Investing
Regression Basics For Business Analysis
This tool is easy to use and can provide valuable information on financial analysis and forecasting. Find out how. 
Markets
Understanding Regression
Regression is a statistical analysis that attempts to predict the effect of one or more variables on another variable. 
Markets
What's a Regressive Tax?
A regressive tax is a levy in a tax system where the tax rate does not change based on the level of income. 
Trading
When Is A Bull Market Not A Bull Market?
During some bull or bear moves in the stock markets, investors will be going with the trend, but day traders may find they cannot. 
Trading
Understand How Square Works before the IPO
Square is reported to have filed for an IPO. For interested investors wondering how the company makes money, Investopedia takes a look at its business. 
Markets
Square Beats on First Public Earnings Report (SQ, TWTR)
With Square opting to withhold forward guidance, investors would do well to withhold some enthusiasm. 
Trading
Guide To Excel For Finance: Valuation Methods
DCF There is not a specific function to run a full discounted cash flow model in Excel, but there are a number of tools to make the exercise much more straightforward. As touched upon in the ... 
Markets
Starbucks and Square Part Ways in Mobile Payments (SBUX, PYPL)
Payment processing company Square recently stated that it won't renew its partnership with coffee giant, Starbucks (NASDAQ: SBUX), when it expires in the third quarter of next year. Square initially ... 
Investing
5 Ways to Create Residual Income
Here are 5 ways through which you can create residual streams of income.

How can I run linear and multiple regressions in Excel?
Learn the steps involved in running a regression in Microsoft Excel: preparations, uploading data and using the regression ... Read Answer >> 
What is the difference between linear regression and multiple regression?
Learn the difference between linear regression and multiple regression and how multiple regression encompasses not only linear ... Read Answer >> 
How is residual value of assets taxed?
Find out how and when taxes are assessed on the different kinds of residual value, including the residual value on a leased ... Read Answer >> 
Is residual income considered profit?
Understand what residual income is and under what circumstances it may be considered profit. Learn how this can benefit personal ... Read Answer >> 
What is the difference between residual income and operational income?
Understand the key factors that go into calculating operational and residual income, as well as what each of these categories ... Read Answer >> 
How is residual value of an asset determined?
Understand what the residual value of an asset is and how the residual value of an asset is calculated. Learn how residual ... Read Answer >>