Trend / index-adjusted sales.

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
Hiya.<BR><BR>You're not looking for the trend in <i>Sales</i>, but in <i>Indexed-Adjusted Sales</i>.<BR><BR>You will have been given the index figures and the base to work on. Recalculate the sales figures at the base rate and the trend will become obvious.<BR><BR>For example, with your figures, let's say the index rates are :<BR><BR>Year 1 = 100<BR>Year 2 = 110<BR>Year 3 = 120<BR><BR>Then, stated at Year 1 prices, the relative sales values are:<BR><BR>Year 1 = 775k<BR>Year 2 = 657k<BR>Year 3 = 639k<BR><BR>In this case, the trend (in real terms) is down.<BR><BR>Interestingly, if you stated the figures with Year 3 as the nase rate, you would get an upward trend!<BR><BR>Mike

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trend / index-adjusted sales.

    i think i have calculated the figures roung the wrong way.<BR><BR>to bring the past figures up to the current RPI<BR><BR>i was dividing by the yr 1 and then multiplying by the yr 3<BR><BR>But should i not multiply the sales by the year RPI then divide it by the current year?<BR><BR>Oh i am confused!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trend / index-adjusted sales.

    It depends on which year you are using as your base year.<BR><BR>If it's year 1, then you divide year 2 by year 2 index, multiply by year 1 index; divide by year 3 by year 3 index and multiply by year 1 index.<BR><BR>If it's year 3, then you divide year 1 by year 1 index, multiply by year 3 index; divide by year 2 by year 2 index and multiply by year 3 index.<BR><BR>Mike<BR>

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