Value index numbers, Financial Management

Assignment Help:

Value Index Numbers

The value index number as described earlier is a combination index which combines price and quantity changes. Because of the difficulties experienced in price and quantity indices, the usage of the value index has been suggested. The value index number can be calculated by the following formula,

=

885_value index numbers.png

where, P1, Q1, P0 and Q0 follow the usual notations.

Interestingly, in value indices, weights need not be used as they are inherent in these indices. The value index, an aggregate of all values, measures the changes in values in the base year and the values in the given year. The value index can also be obtained by the product of price and quantity indices. Let us calculate the value of some equity shares owned by an investor on July 27, 20x1 relative to the value of the shares owned by him on Jan 8, 20x0 as measured by the value index.

Value Index

1682_value index numbers1.png


Related Discussions:- Value index numbers

Optimal cash model, Optimal Cash Model: Cash Management is a bigger as...

Optimal Cash Model: Cash Management is a bigger aspect that involves range of functions that assist individuals and business to process their payments and receipts in an organ

Define flotation costs affect cost of raising that capital, When a company ...

When a company issues new securities, how do flotation costs affect the cost of raising that capital? While a company issues new securities flotation costs raise the cost of rais

Describe the types of financial ratios, 1. Describe the types of financial ...

1. Describe the types of financial ratios and other financial performance measures that are used during a venture's successful life cycle. Who are the users of financial performan

What are the types of theft threats, What are the types of theft threats?  ...

What are the types of theft threats?  Describe the methods to access and overcome theft threats. Types of theft threats - Mass theft, Pilferage theft. Steps to assess threats

Price-yield relationship of a callable bond, The price-yield relation...

The price-yield relationship of a non-callable or a non-putable bond is convex because price and yield are inversely proportional. Figure 1 shows the price-yield

Dual currency bonds, In the case of dual currency b...

In the case of dual currency bonds, the interest is paid in one currency, while the principal repayment is made in another currency. Deep Di

Agency relationship, what are the ten agency problems between shareholders ...

what are the ten agency problems between shareholders and auditors and their solutions

Weighted average cost of capital of firm, Weighted average cost of capital ...

Weighted average cost of capital of Firm: Use the following information to answer the questions. Security Beta Expected retur

Money market mutual funds (mmmfs), Since the operations in the money ...

Since the operations in the money market are dominated by institutional players, the retail investor's participation in the market seems to be limited. To overcom

Defects in the companys system, The case of McKesson & Robbins scandal (193...

The case of McKesson & Robbins scandal (1938) was happen due to internal fraud. This case is also happen by the faulty work of board of directors. The organization of McKesson & Ro

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd