calculate trends

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Registered Posts: 24 New contributor 🐸
Can someone help we have been given turnover for four seperate months along with seasonal variation and told to calculate the trend for each month. Do I just take seasonal variation away from turnover to get the trend for each month. I am used to calculating trend on time series working my way along from sales to moving average then trend. This is some homework we have been set and need a little guidance please.

• Registered, Moderator Posts: 2,034 mod
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If you know the sales turnover and you know the seasonal variation, your approach is ideal.

For example:
QuarterYear..................................Quarter 1................. Quarter 2................. Quarter 3................. Quarter 4

2007 Actual sales......... ......................4,200..................... 4,500.......................4,300.......................4,200

Seasonal variation......... ......................+200...................... +300........................-100.......................-400

2007 Trend................. ......................4,000..................... 4,200.......................4,400.......................4,600
Sandy
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• Registered, Moderator Posts: 2,034 mod
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To convert the sales in units to the sales revenue, multiply by the price per unit
So here we can project the trend into the future (add 200 units per quarter), then adjust using the seasonal variation to get the forecast sales volume.
The next step is to multiply by price.
Sandy
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• Registered Posts: 85 Regular contributor ⭐
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SandyHood wrote: »
If you know the sales turnover and you know the seasonal variation, your approach is ideal.

For example:
QuarterYear..................................Quarter 1................. Quarter 2................. Quarter 3................. Quarter 4

2007 Actual sales......... ......................4,200..................... 4,500.......................4,300.......................4,200

Seasonal variation......... ......................+200...................... +300........................-100.......................-400

2007 Trend................. ......................4,000..................... 4,200.......................4,400.......................4,600

Hi
I am hoping that someone can help me please, I ask to calculate the trend which I did I followed this above calculation they give me the cost of the units which I multiply this my working but I wasn't sure if it is right (4000unit x10= 40,000 as actual sales,+50 seasonal variation =(39,950 is this total I have to calculate for my cash receipts). I am soooooooo confusion i don't know which total to use for the cash receipt calculatiopn which I can't figure it out. I can't refer this in to my textbook in depth details because is not much information this subject into my kaplan book.

Thank you so much in advance!
• Registered Posts: 2,453 Beyond epic contributor 🧙‍♂️
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The 50 of seasonal variations is that units or actual sales price?
• Registered Posts: 85 Regular contributor ⭐
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Rinske wrote: »
The 50 of seasonal variations is that units or actual sales price?

Hi Riske

I was given this

Trend unit 4000
seasonal variation +50 doesn't say if units
each unit are sold for £10

and 40% of the sales are received in the month and the reminder 60% the following month.
• Registered Posts: 2,453 Beyond epic contributor 🧙‍♂️
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Considering the figures and question, I would say the 50 are units.

So for the period, calculate the actual sales, based on Sandy's explanation for the calculations and see if you can work it out from there! He can explain it a lot better, so I'm not going to try and add to that!

As for the receipts. Find the sales revenue first and based on that 40% is paid this month and 60% in the month after.

If you have several months:
In one month you get the payment of 40% of that month's sales revenue and 60% of the previous month's sales revenue.

However, if you ask Sandy nicely, he might draw you up a very nice table, which shows it all a lot clearer than I can explain it.

Cheers,
Rinske
• Registered, Moderator Posts: 2,034 mod
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Starting from
QuarterYear..................................Quarter 1................. Quarter 2................. Quarter 3................. Quarter 4
2007 Trend................. ......................4,000..................... 4,200.......................4,400.......................4,600
2008 Trend................. ......................4,800..................... 5,000.......................5,200.......................5,400
Seasonal variation......... ......................+200...................... +300........................-100.......................-400
Sales forecast (units)...........................5,000..................... 5,300.......................5,100.......................5,000
Price £10..............................................£10.........................£10.........................£10..........................£10
Sales forecast (£)..............................£50,000..................£53,000....................£51,000....................£50,000
Sandy
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QuarterYear..................................Quarter 1................. Quarter 2................. Quarter 3................. Quarter 4
Sales forecast (£)...........................£50,000.....................£53,000....................£51,000....................£50,000
40% of sales in that month ...............£20,000....................£21,200.....................£20,300....................£20,000
60% of sales in the previous month ...not enough data..........£30,000.....................£31,800....................£30,450

Total cash from sales.......................not enough data..........£51,200.....................£52,100....................£50,450
Sandy
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• Registered Posts: 85 Regular contributor ⭐
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Thank you so much, Sandy!

This is what I need a further and thorough explanation your genius.

I really do appreciate your time. Many thanks.........
• Registered, Moderator Posts: 2,034 mod
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Lyn
My signature on my replies is my email address.
You are welcome to use it

I deliberately keep my PM box full, but emails can have attachments unless PMs.
Sandy
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