# How to calculate seasonal variation

Written by melvin richardson
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Many companies have variations in sales, income and other categories based on seasonal fluctuations. An organisation can plan for expansion, growth, production and hiring based on what season it is. If a company is in the midst of a slow season it is going to hire fewer workers and produce fewer products and services. Seasonal variation can be calculated using historical information and other key elements.

## Instructions

1. 1

Determine the categories for which you need to calculate seasonal variation. You may want to find seasonal variation in sales, income, losses, cash collections or products sold.

2. 2

Break up the year into quarters. Review the last couple of years on a quarterly basis. Notice which quarters marked a dramatic increase or decrease in production or sales, for example.

3. 3

Determine how many customers purchased products during a slow quarter. If your sales are slow for the first quarter of every year, you might attribute it to a slump after holiday spending during the last quarter of the previous year. In November and December many people spend heavily and then decrease their spending during the first quarter. Count the number of customers that typically spend during the first quarter.

4. 4

Compute the amount of your sales for the first quarter. Using the figure from Step 3, determine the average sale per customer. If you have 30,000 customers and sales of £1 million, your average sale per customer is £33.33, (£1,000,000/30,000).

5. 5

Figure out your average sales figure per customer for the second quarter. If your sales are £1.1 million for the second quarter, and you have 40,000 customers who bought products, your average sale per customer is £27.50. Compare sales figures for the first and second quarters.

6. 6

Evaluate factors that account for the difference in sales between the quarters. Economic factors can contribute to the increase. In the first quarter, people are paying down debt accumulated in the fourth quarter of the previous year. In the second quarter, many people receive tax refunds. When people have more disposable income they have a tendency to spend more.

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