Seasonal variation in time series analysis, Financial Management

 

Seasonal Variation

Under this variation, we observe that the variable under consideration shows a similar pattern during certain months of the successive years. An example of seasonal variation would be an increase in water borne diseases during rainy season. That is, this phenomenon seems to be repeating itself every year in a regular fashion. Usually, the time period over which this variation is considered can consist of days, weeks, months and at the most one year. The seasonal variation is depicted in the figure below. We can observe the uniformity in the pattern during every second quarter of the year.

88_seasonal variation.png

The study of trends has a positive impact on the overall analysis and facilitate the process of drawing more meaningful conclusions. The analysis is useful because

  1. It helps us to establish the pattern of changes during the same period in different years and examine the reason for the same.

  2. It helps us to project the past patterns into future. The projections from the seasonal variations are helpful in formulating short-term objectives of a firm. This is similar to the projection of the secular trend into the future for achieving the long-term goals.

  3. It helps the identification of the seasonal trend in a time series to isolate it and study the impact of other components of variation in the series.

Posted Date: 9/17/2012 3:37:36 AM | Location : United States







Related Discussions:- Seasonal variation in time series analysis, Assignment Help, Ask Question on Seasonal variation in time series analysis, Get Answer, Expert's Help, Seasonal variation in time series analysis Discussions

Write discussion on Seasonal variation in time series analysis
Your posts are moderated
Related Questions
Citilink will start a new business line on 1st July, 2011 to make and sell bus souvenirs. The target sales and production volume are 525,000 in next year. The following projected

A floater where the coupon rate is computed as a fraction of the reference rate plus a quoted margin, are known as a de-leveraged floater. The general formula for this

Q. Consequence of the cash operating cycle? The cash operating cycle is the length of time among paying trade payables and receiving cash from receivables. It is able to be cal

Goral is required to pay five equal annual payments of Rs. 10,000 each in his deposit account that pays 10% interest per year. Find out the future value of annuity at the end of fi

Briefly discuss some of the services that international banks provide their customers and the market place. Answer:  International banks can be categorized by the types of servic

Q. Illustrate Miller-Orr model recognises? The Miller-Orr model recognises which cash balance requirements are likely to fluctuate and that active management is required in r

Determine about the Shareholders Shareholders, being the owners of the company, elect board of directors and vote on major issues that affect functioning and long term plans of

What is accumulated depreciation? Depreciation is the provision of an asset's initial cost over time.  Accumulated depreciation is the sum of all the depreciation expense that

Methods of workers participation in management: the various methods of workers participation in management are as follows: 1. Informative participation: it refers to sharing of

Explain how a firm determines the optimal level of current assets. The optimal level of working capital is defined by finding the amount that balances the requirement for liquidi