In a trend analysis, an index number of 139 for 2009 sales indicates that
A) sales for 2009 were 139 percent higher than sales for the same company in the base year.
B) sales for 2009 for this company were 139 percent of the sales figure of another company being used in the comparison.
C) sales for 2009 were 139 percent of the sales for the same company in the base year.
D) actual sales for 2009 exceeded budgeted sales for 2009 by 39 percent.

Question

Quizplus · Accepted Answer

In trend analysis, the index number represents the ratio of the value being analyzed (in this case, sales for 2009) to the value in the base year (which is usually given an index number of 100). Therefore, an index number of 139 means that sales for 2009 were 139% of sales in the base year. Option A is incorrect because an index number of 139 doesn't mean sales were 139% higher than in the base year. Option B is incorrect because the comparison is within the same company and not with another company. Option D is incorrect because there is no reference to budgeted sales in the question.

In a Trend Analysis, an Index Number of 139 for 2009