Question

3.The quarterly earnings (in $ millions) of a steel company have been recorded as follows:

		Period	Actual Earnings	Average	Seasonal ratio	Seasonal index
2016	Quarter 1	1	334
	Quarter 2	2	492
	Quarter 3	3	368
	Quarter 4	4	278
2017	Quarter 1	5	324
	Quarter 2	6	550
	Quarter 3	7	394
	Quarter 4	8	288
2018	Quarter 1	9	314
	Quarter 2	10	532
	Quarter 3	11	394
	Quarter 4	12	312
2019	Quarter 1	1	344
	Quarter 2	2	522
	Quarter 3	3	368
	Quarter 4	4	298

Complete the table above and calculate the seasonal indices. Round all seasonal ratios and seasonal indices to two decimal places. ( 5 marks)

Suppose projected earnings for 2020 are $1600 million, what earnings should the company expect in each quarter (2 decimal places)? ( 2 marks)

Only this info is provided

Answer 1

				Centered
				Moving	Ratio to	Seasonal
t	Year	Quarter	Data	Average	CMA	Indexes
1	1	1	492			1.38
2	1	2	368			1.01
3	1	3	278	372.750	0.75	0.76
4	1	4	324	383.250	0.85	0.85
5	2	1	550	387.750	1.42	1.38
6	2	2	394	387.750	1.02	1.01
7	2	3	288	384.250	0.75	0.76
8	2	4	314	382.000	0.82	0.85
9	3	1	532	385.000	1.38	1.38
10	3	2	394	391.750	1.01	1.01
11	3	3	312	394.250	0.79	0.76
12	3	4	344	389.750	0.88	0.85
13	4	1	522	384.750	1.36	1.38
14	4	2	368			1.01
15	4	3	298			0.76
	4	4				0.85

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403482061.4

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