Indexing/Intermediate
LEONa
Registered Posts: 4 New contributor 🐸
For the more mathematically minded, can anyone tell me whether I am right in thinking that in calculating index numbers (factors), you are simply calculating the percentage increase of each year (for example), against the base year, hence the value of the base year is always 100?
Also, when you have been given a sales figure, for example, and an index factor which related to a base figure of 100, being the value of the index in the base period in 2002, e.g. sales figure 1220, index factor 147.3, what is the formula to arrive at the indexed total, and any suggestions or tips how to easily remember it!
Addit:confused1:
Also, when you have been given a sales figure, for example, and an index factor which related to a base figure of 100, being the value of the index in the base period in 2002, e.g. sales figure 1220, index factor 147.3, what is the formula to arrive at the indexed total, and any suggestions or tips how to easily remember it!
Addit:confused1:
0
Comments

We always got taught 'divide by where you are, times by where you want to be'.
Ie:
Year Sales Index
2002 £10500 141.2
2003 £12607 154.5
2004 £13024 161.3
2005 £17958 168.8
If you were to calculate the 'real' 2005 sales figures (by removing inflation) at the 2002 level, you would divide the £17958 'by where you are' (by 168.8) and 'times by where you want to be' (multiply by 141.2). This gives you a figure of £15021 which is the 'true' value after taking out inflation, not the £17958 that is at current prices.
Hope this helps0 
Indexing
Thank you for your help  I find phrases which sum up succinctly what you are supposed to do very helpful and memorable. Thanks. :thumbup:0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 265 NEW! Qualifications 2022
 147 General Qualifications 2022 discussion
 9 AAT Level 2 Certificate in Accounting
 42 AAT Level 3 Diploma in Accounting
 64 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 274 VAT
 92 Software
 274 Tax
 138 Bookkeeping
 7.3K General accounting discussion
 193 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 590 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership