A seasonal index is a measure of how a particular season through some cycle compares with the average season of that cycle. By deseasonalizing data, we’re removing seasonal fluctuations, or patterns in the data, to predict or approximate future data values. Seasonal indices.
Consequently, what is seasonal index in time series?
Measuring seasonality. Seasonal variation is measured in terms of an index, called a seasonal index. It is an average that can be used to compare an actual observation relative to what it would be if there were no seasonal variation. An index value is attached to each period of the time series within a year.
Furthermore, what would a seasonal index of 1.25 mean? This means that on average, Q1 is 125% of the average quarter. This is an “above average” quarter. A seasonal index below 1 means that it is a “below average” quarter; .
Subsequently, one may also ask, how do you find seasonal index?
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. =Period Amount / Average Amount or, for example, =B2/$B$15.
How do you do seasonal index in Excel?
This will calculate the average monthly sales for the year. Enter the following formula into cell C2: “=B2 / B$15” omitting the quotation marks. This will divide the actual sales value by the average sales value, giving a seasonal index value. Select cell C2.