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Chapter 12
Index numbers
6.1 Index numbers
An index number is a technique for comparing, over time, changes in some feature of
a group of items (e.g. price or quantity) by expressing the property each period as a
percentage of some earlier period.
6.2 Calculating an index number
An index number is calculated as:
Current value ÷ base value × 100
6.3 Using an index number
Index numbers can also be used to forecast future data to be in cash flows.
The formula for using an index is:
Current index ÷ base index × base value
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