Learn how to create weights for different months based on seasonality and apply this to simple moving average calculation in Microsoft Excel.
- [Instructor] I'm in the 02_03_Begin exercise file.…I generated a line graph of our fictitious…sporting goods store sales figures over time.…Now, just by looking at the graph you can tell…that the sales are trending upward.…However, it's a bit difficult to make a prediction…of exactly what the July 2017 figure's going to be…in B32 by looking at this graph.…You can see that their are several irregularities here.…There are peaks and valleys, and ups and downs.…So it's a little bit difficult to figure out how do I zone…in on exactly what that 2017 July figure is going to be.…
Well, I could use a simple moving average, but I think…that approach is just a little bit too simplistic.…Remember, all we do is we take the average…of three months prior to the month that you want to predict.…It's a simple sum, you just divide it by three.…And I want to think about this another way.…What if we were to say that the month immediately…before the one we're trying to predict has more value…than the other two months in our three-month moving average.…
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- Explain the four different types of financial statements.
- Distinguish between the types of moving averages.
- Determine a seasonal adjusted trend.
- Break down pro-forma financial statements.
- Identify cash flows, and what increased liabilities and decreased earnings generally indicate.
- Tell what a regression is.
- Outline the naive approach.