Seasonal index

Each month's share of annual revenue against an even twelfth, from three years of the company's own history, per segment and per account where the account's pattern differs. A trailing figure divided by the index is deseasonalised. Same period last year is the default comparison; the index is for when it is unavailable or the in-year trend matters.

DefinitionEach month's share of annual revenue against an even twelfth, from three years of the company's own history, per segment and per account where the account's pattern differs. A trailing figure divided by the index is deseasonalised. Same period last year is the default comparison; the index is for when it is unavailable or the in-year trend matters.

Own season

The school caterer closed in August is on schedule against its own index and dormant against the segment's.

Comparison stated

Year-on-year, index-adjusted or raw, on every trend line. Raw is never shown alone on a seasonal measure.

How it is computed

Each month's revenue as a ratio to its own year's average month, averaged across two or more complete years. The twelve indices sum to twelve.

Example

August has an index of 0.74 and December 1.16. August sales of $760,000 adjust to $1,027,000, better than July's adjusted $1,000,000.

Where it goes wrong

Computed from one year, so a one-off order becomes every year's pattern.

Articles that use this term

Forecast and pipeline

Run rate and forecast: why the floor is not the plan, and what the gap between them is made of

Why run rate is the floor a forecast should be compared to rather than a forecast itself, what the gap between the two is made of, new business, expansion, churn, seasonality and known changes, the bridge from run rate to forecast with a line for each, the forecast that sits below run rate and needs a reason, the one far above it and needs pipeline, and the rule that the forecast is defended by the lines between it and the floor.

16 Sept 20263 min read Forecast and pipeline

Seasonality in sales measures: same period last year, not the trailing average

How seasonality distorts every trend-based measure, run rate, dormancy, surge, forecast bias, and the two comparisons that handle it: same period last year, and a seasonal index from the company's own history. When each applies, how the index is built per segment and per account, the accounts whose seasonality is their own, the rule that the comparison is stated on the line, and the four measures where the trailing average is simply wrong.

16 Sept 20262 min read How-to guides

How to calculate a sales seasonality index in Excel, and use it to read this month properly

A step-by-step guide to computing a monthly seasonality index in Excel from two or three years of sales: monthly totals with SUMIFS, each month as a ratio to its year's average, the index as the average of those ratios, the check that the twelve indices sum to twelve, and three uses: seasonally adjusting this month's figure, building a run rate that does not mislead, and spreading an annual target across months. Includes the exact formulas, what to do with one-off spikes, and the point at which the spreadsheet stops being enough.

17 Sept 20264 min read Forecast and pipeline

Run rate and seasonality on twelve months: the whole arithmetic on one page

The complete run rate and seasonal index calculation on one company's twelve months of revenue, small enough to check by hand: the trailing three-month run rate at four points in the year and how far each is from the actual year, the seasonal index per month from three years' shares, the deseasonalised run rate, the same-period-last-year comparison, and the one-off order that doubles a quarter, so a reader can reproduce every figure and then run it on their own ledger.

17 Sept 20263 min read How-to guides

The worked examples: every measure on ten rows you can check by hand

A hub for the worked-example pages on this site: each core measure computed in full on a book small enough to check by hand, ten accounts, ten deals, ten invoice lines, five clients, four territories, with every intermediate figure shown and the identity at the end. This page lists them by measure with what each example demonstrates, so a reader can reproduce the arithmetic before running it on their own export.

17 Sept 20268 min read