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Definition of 'Base-Year Analysis'
1. The analysis of economic trends in relation to a specific base year. Base-year analysis expresses economic measures in base-year prices to eliminate the effects of inflation.
2. The analysis of a company's financial statements by comparing current data with that of a previous year, or base year. Base-year analysis allows for comparison between current performance and historical performance.
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Investopedia explains 'Base-Year Analysis'
1. Base-year analysis is often used when expressing gross domestic product, and is known as real GDP when referred to in this way. By eliminating inflation, the trend of economic growth is more accurate, as price level changes are accounted for.
$$ (Base Year) = $$ (Chosen Year) x Price Index (Base Year) / Price Index (Chosen Year)
2. Base-year analysis of a company's financial statements is important to be able to determine whether a company is growing or shrinking. If, for example, a company is profitable every year, the fact that its revenues are shrinking year-over-year may go unnoticed. By comparing revenues and profits to those of a previous year, a more detailed picture emerges.
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Search results for 'Base-Year Analysis'
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http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/nominal-real-gdp-deflator.asp
... Tools; Term Of The Day. Dictionary; Active Trading; Forex; Technical Analysis;
Brokers; Options; Futures; Personal Finance; ... More Analysis ». Dow ...
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http://www.investopedia.com/articles/economics/11/flaws-in-market-indicators.asp
... April 25 2011 | Filed Under » Economics, Fundamental Analysis. Economists and other
market ... multiple years using a specific year as the base year without proper ...
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http://www.investopedia.com/university/releases/cpi.asp
... The current base year for the CPI is 1982, so changes will typically be provided
on a percentage basis to reflect only changes to prior index levels. ...
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http://www.investopedia.com/university/releases/gdp.asp
... Released By: Bureau of Economic Analysis (BEA). ... indexes discussed in earlier topics
are used to create Real GDP Quantity Indexes with a current base year of 2000 ...
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http://www.investopedia.com/university/releases/ppi.asp
... Like the CPI, the PPI uses a benchmark year in which a basket of goods was measured,
and every year after is compared to the base year, which has a value of 100 ...
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http://www.investopedia.com/university/releases/productioncapacity.asp
... capacity utilization ratios for each line of business, with a base year used as ... This
can lead investors to an analysis of supply chains and which sectors could ...
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http://www.investopedia.com/articles/economics/11/breaking-down-producers-price-index.asp
... compared to those faced in 1982, which serves as the base year for the ... the price
changes of intermediate processed and unprocessed goods, the analysis began to ...
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http://www.investopedia.com/articles/04/102004.asp
... The base-year market basket, of which the CPI is composed of, is derived from detailed
expenditure information collected from thousands of families across the ...
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