How To Calculate The Seasonality Index

Table of contents:

How To Calculate The Seasonality Index
How To Calculate The Seasonality Index

Video: How To Calculate The Seasonality Index

Video: Seasonal indices: calculating SI and deaseasonalising data 2022, November
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The activities of any enterprise are tied to a planned economic strategy for the production of products or the provision of services. Many companies also include seasonal factors in their targets, which directly affect the decline and growth in demand for services and products. During planning, it is imperative to take into account such a parameter as the seasonality index.

How to calculate the seasonality index
How to calculate the seasonality index

Instructions

Step 1

List the statistics for the past few years. It is necessary to present them in quantitative terms. You should not take data from official statistics, as they do not always accurately describe the real state of affairs.

Step 2

Analyze the collected statistics. Exclude abnormally small or large values ​​from the list. These data are not part of statistics and show only one-time large transactions or force majeure circumstances that are unusual for the company's activities and which are unlikely to recur. In this regard, random parameters should not be taken into account in statistics.

Step 3

Decide on the required detail. Depending on the field of activity of the enterprise, this can be accounting by months or by weeks. For example, if a business sells food products, then in the pre-holiday weeks, you can expect an increase in sales, so weekly records will better reflect the true state of affairs.

Step 4

Calculate the average of the services or products provided for each week or month over the selected period of years. Determine the average monthly and average annual volume of services provided or production of products for the required number of years.

Step 5

Calculate the predicted seasonality index for a specific month or week. It is equal to the ratio of the average value of the volume of provision of services or production of products for a specified number of years for the desired month to the average monthly volume of provision of services or production of products for a specific number of years. The seasonality index characterizes the percentage of the share of the volume of services or production in comparison with the average monthly volume for the year. Use the seasonality index to plan and forecast the activities of the enterprise for the next year.

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