Page 206 - Microsoft Word - 00 ACCA F2 Prelims.docx

Chaptter 12

5.3 MMoving aveerages

Stepp 1

Chooose the coorrect cyclee length. Foor instancee, if there aare seasonnal variations
pressent in a timme series aand the paattern is reppeated eveery third peeriod (quarterly),
the mmoving aveerage shouuld be calcculated bassed on threee periods at a time tto get
the bbest resultss. It is posssible to calculate a mmoving aveerage baseed on any length
of cyycle.

Stepp 2

Calcculate the ttotal for thee first cyclee.

Stepp 3

Calcculate the aaverage byy dividing tthe total byy the numbber of perioods in the ccycle.

Stepp 4

Repe eat the proocess for thhe next cyccle, movingg on just oone period.

Repeeat the callculation foor each succcessive cyycle until thhe data haas been fully
analysed.

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