Quoting Borg999,
reply 17
A trend has nothing to do with statistics..
Nice try. How about 2 points ...first at 100 second at 50 ...which one is an aberration perhaps? Perhaps both...perhaps neither.
Only a fool would suppose a third point would be zero ....but it's a "trend".
Take your 6 points/months...it may just be 'off-season' [commercially] and exactly the same trend if you look at previous [or later] years.
6 months of reducing sales/numbers/whatever may be actually NORMAL.
Statistics are required to be sampled correctly to be legitimate. They CANNOT be sampled to suit one's argument.
Lies....damn lies...and statistics.
Sorry nice try yourself.
First, I specified "seasonally adjusted" because I new your were going to try to make that arguement. That is, seasonally adjusted numbers are normalized.
In regard to your 100/50 comment....In finanacial analysis, if you encounter 2 extreme numbers in a trend, the first thing you do is look at the accounting records. Did the staff accountant transpose numbers? Was there an adjusting entry from a prior period that was posted in the current perid, etc.
If that doesn't yeild results, then you look at the drivers. (the volume of something that driver sales - e.g number of units sold) - Did a mistake occur in the recording of those drivers? If not, you go to the ops folks and ask? Was there a supply disruption? An external event out of the company's control? did a customer terminate a contract? is this a one time event? Do you expect it to continue, etc?
Typically, at the beginning of each year, a budget is built based on expectations for the next year that is based on economic conditions and company events known at the time. To standardize the process, dollar amounts are built on a rate/volume basis (e.g.units x sales per unit, or job hours worked x hourly rate, etc.). If the actual results deviate from the budget, closer examination is warranted. This analysis is typically done on a monthly basis.
Only a fool allows downward trends to continue for more than three months ("until there is enough data") without examining the underlying cause.
I seriously hope you're not a member of SD's Finance team....