Value index numbers, Financial Management

Value Index Numbers

The value index number as described earlier is a combination index which combines price and quantity changes. Because of the difficulties experienced in price and quantity indices, the usage of the value index has been suggested. The value index number can be calculated by the following formula,

=

885_value index numbers.png

where, P1, Q1, P0 and Q0 follow the usual notations.

Interestingly, in value indices, weights need not be used as they are inherent in these indices. The value index, an aggregate of all values, measures the changes in values in the base year and the values in the given year. The value index can also be obtained by the product of price and quantity indices. Let us calculate the value of some equity shares owned by an investor on July 27, 20x1 relative to the value of the shares owned by him on Jan 8, 20x0 as measured by the value index.

Value Index

1682_value index numbers1.png

Posted Date: 9/17/2012 2:55:50 AM | Location : United States







Related Discussions:- Value index numbers, Assignment Help, Ask Question on Value index numbers, Get Answer, Expert's Help, Value index numbers Discussions

Write discussion on Value index numbers
Your posts are moderated
Related Questions
Question: A 10-year deferred life assurance policy with variable benefits is issued to a select life aged 36. The policy provides the following benefits:- Sum assured is

You are considering starting a walk-in-clinic. Your financial projections for the first year of operation are as follows: Revenues (10,000 visits) $400,000 Wages and benefits $220,

agency relationship between shareholders and auditors

Q. What is Deposit Method? Deposit Method - Related to sales of real estate, under this method seller doesn't recognize any profits, doesn't record a note RECEIVABLE and contin

Q. Benefits of Interest rate swaps? Interest rate swaps may provide several benefits to companies including: - The ability to get finance at a cheaper cost than would be p

Using an appropriate 'factor model', assess (a) the performance of the management in creating value for shareholders and (b) the extent of the foreign exchange exposure of a FTSE10

What are the advantages and the disadvantages of a new stock issue? A new stock issue increases funds and reduces the riskiness of the firm. It as well tends to send a negative

Documenting the accounting system There are 3 methods generally used to document the clients system. Narrative notes: Written description of the system Advantages:- C

Settlement of the Index Options Contract In the index options contract, the premium to be paid or to be received is calculated for each CM after netting the positions at the en

What is the difference among pro forma financial statements and a cash budget?  Explain why pro forma financial statements are not employed to forecast cash needs. Pro forma inco