Percentage Growth / Weighing Function
One of my collegues at work came up with this formula to weigh the growth of a product. Here is the equation: ((CQTY Market Percent)/((CQLY Market Percent * .4) + (MATLY Market Percent * .6)) * 100.
MATLY = moving annual total last year Apr 2003 - Mar 2004)
CQTY = current quarter this year (Jan - Mar 2005)
CQLY = current quarter last year (Jan - Mar 2004)
He told me that this equation would remove the highs and lows of the market and would be a better indicator of how the product is performing. :confused: I am not convinced. I don't understand how exactly he formulated this equation and whether it is logically sound. We want to create a mechanism by which we can guage the performance of a product in respect to it's market share. Want to compare the CQTY market share with a longer time period. So we can understand whether the product is actually growing or just in a cyclical high. Does this make sense? I am in dire need of some math tutoring. :)
what kind of cycle is this based on?
Normally products are cyclic on an annual basis. Does this product have different highs and lows that are not related to the calendar? Or at least not on a 12 month cycle?
The best way to comapare may not be April to April especially if you had a 10 month cycle.
the formuala you have posted seems to be arbitrary with the 40 60 percent thing.
Give us some info about the product.