How to Use Microsoft Excel to Calculate Seasonal Indexes

Save

A seasonal index indicates how a periodic amount -- typically a month -- compares to the average of all periods in an extended period, such as a year. Because seasonal indexes measure price fluctuations, they're commonly used in sales forecasting, but seasonal indexes can be used to analyze any activity that is influenced by the season or specific time of year. Microsoft Excel is an excellent tool for calculating seasonal indexes.

Step 1: Open the Excel Workbook

Open the Excel workbook that contains your data. Your data should be arranged in adjacent columns or rows to simplify the functions and their calculations.

Step 2: Totals and Averages

(Image: Ron Price)

In the cell below the last entry of the period amounts, type the function =SUM(...) , replacing the ellipses with the cell references of the cells you want to total up for all of the period amounts. Underneath the total, type in an =AVERAGE(...) function, using the same cell references, to calculate the average period amount. In the example shown, the two entries are =SUM(B2:B13) and =AVERAGE(B2:B13).

Step 3: Calculate the Indexes

(Image: Ron Price)

The seasonal index of each value is calculated by dividing the period amount by the average of all periods. This creates a relationship between the period amount and the average that reflects how much a period is higher or lower than the average.

The formula for calculating the index is

=Period Amount / Average Amount or, for example, =B2/$B$15.

The index amount represents a decimal fraction indicating the ratio of a period amount to the average of all periods. For example, the index for January is 0.76. This means that January is about 76 percent of the average. August has an index of 1.83, indicating it is about 183 percent of the average.

Promoted By Zergnet

Comments

You May Also Like

  • How do I Calculate Seasonality?

    Seasonality refers to periodic fluctuations exhibited by time series, or a statistical sequence of data points measured at uniform time intervals. Seasonality...

  • How to Calculate Case Mix Index

    The case mix index for a healthcare facility reflects costs incurred to provide services and treatments that inpatients require. In general, the...

  • How to Use an Index

    Most reference books have a table of contents in the beginning, which tells you about the chapters in the book. But the...

  • How to Use Microsoft Excel's FORECAST Formula

    Learn how to use Excel's FORECAST function to predict a value for Y using a specific value of X, based on known...

  • How to Calculate Index Numbers

    Index numbers represent the amount of change compared to a base value. For example, the _consumer price index_ measures the total price...

  • How to Use Excel in Statistics Calculations

    The field of statistics uses complex mathematics to analyze data. Microsoft Excel is aptly suited to this work due to its flexibility...

  • How to Calculate a Sales Index

    The sales index shows the fluctuations of sales from one time period to another in terms of percentages.

  • How to Calculate a Profitability Index

    Business owners use the profitability index to determine if a capital investment will produce a profit.

  • How to Calculate Seasons in Excel

    Since Excel doesn't include any format that includes the season, you must create a formula that looks up a season for you...

  • How to Calculate CK-MB

    CK-MB is an abbreviation for the Creatine Kinase-MB blood test. Levels of CK-MB in your blood rise when there is injury to...

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!