What does an r-squared value of 1 indicate in linear regression?

An r-squared value of 1 indicates a perfect fit of the model to the data. In the context of linear regression, r-squared is a statistical measure that represents the proportion of variance for a dependent variable that's explained by an independent variable or variables in a regression model. When r-squared equals 1, it means that the model explains 100% of the variability in the response data around its mean. This situation signifies that there is a perfect correlation between the independent and dependent variables; the predicted values from the model will match the actual data points exactly, showing no deviation. Therefore, an r-squared of 1 portrays an ideal scenario in which the regression line perfectly aligns with every single point in the dataset.