In Statistics, Economics and Finance, an index is a statistical measure of change in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment.

1. INDEX NUMBER
Prepared And Presented By:
Mohammad Rahmatullah
ID: 182006031

2. Content
• Introduction to index number
• Some points should be kept in mind for constructing index number
• Uses of index number in business
• How index number helps to take business decision
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3. Introduction to index number
• index number is a tool that we generally use to measure the
difference in relative changes
• Index numbers are always based on items
• It helps with framing the simple and suitable policies by providing
guidelines
• The use of index number helps in tackling the future enhancement of
the economic activities
• numerous methods can be used for proper construction of index
number
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4. Some points should be kept in mind for constructing
index number
• The items should be representative of the tastes, habits and customs
of the people
• Items should be recognizable
• Items should be stable in quality over two different periods and
places
• The economic and social importance of various items should be
considered
• The items should be fairly large in number
• All those varieties of a commodity which are in common use and are
stable in character should be included
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5. Uses of index number in business
• Used in the fields of commerce, meteorology, labor, industry, etc
• Measure fluctuations during intervals of time, group differences of
geographical position of degree, etc
• Used to compare the total variations in the prices of different
commodities
• Measure the purchasing power of money
• Helpful in forecasting future economic trends
• used in studying the difference between the comparable categories of
animals, people or items
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6. How index number helps to take business decision
• helps us quantify changes in any business field
• easier to see one value than a thousand different values for each item
in business field
• look at the stock value of each companies to see how the companies
are doing as a whole
• look at the cost of each item and compare it to its cost from last year
• To analyze or research any business data, we need help of index
number
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7. Thank you

8. Any question ?
Feel free to ask