Stats Fact of the Week: Week of December 3, 2018
Last week, we discussed how index data in NFPA’s Confidential Shipment Statistics (CSS) program helps keep data comparable from one time period to the next when changes in participation occur. Unlike dollar data, the change in participation has a minimal effect on index data because the calculation accounts for a missing participant’s current data. It does this by removing the participant’s base year data, a comparable fixed point in time. This week we will explore various types of analysis that can be performed using index data, further emphasizing just how easily CSS index data fits into your company’s strategic planning process.
More about Index Analysis
Index data can be treated like any other real number. For example, the percent change between $131 and $152 and indexes of 131.0 and 152.0 are conducted the same way. While index data cannot be directly compared to dollar data, it can be indirectly compared to yield very useful results. One popular method is to calculate and compare percentage changes for a company’s dollar data and NFPA’s CSS index data (which represents our industry) from one month to another:
Company A lists its pneumatic sales data measured in dollars along with the CSS pneumatic shipments index. Comparing the monthly percent change between the two data series, you can identify possible gains and losses in market share. September 2018’s sizable gain by Company A compared to the industry is a strong indication of gained market share.
Creating a graph based on your company’s data can be especially helpful in tracking trends. The graph below shows Company A’s pneumatic shipments, measured in dollars, and provides a picture of their pneumatic shipment trends over time.
Taking it a Step Further
Your company dollar data becomes even more comparable to CSS index data when you transform your dollar data into index data. You can then directly compare your company data with CSS data and even benchmark your company’s performance.
To transform your company’s dollar data into an index that is comparable to another index data series, you need to use the same base year used by the other index data series, which will provide a meaningful basis for comparison of data over time. CSS index data currently uses 2013 as the base year:
Company A calculates a base year dollar figure by taking the average number of dollars shipped monthly in 2013 ($1,501,641 as shown above). Company A applies the index formula to its monthly dollar totals (as shown above).
(Current $ / Base Year $)*100 or (1,612,358 / 1,501,641)*100 = 107.4
Creating a trend graph of Company A’s index data quickly reveals the exact same trend line as shown above in Company A’s trend graph using dollar data:
Benchmark Company Performance
Now that both Company A’s and the CSS data is directly comparable, both data series can be plotted on the same graph, making it easy to compare Company A’s performance with the industry’s performance:
Let NFPA Supply the Tools
NFPA’s Stats Toolkit is the perfect tool for creating graphs quickly and easily and is a benefit of participation in the CSS program. This cloud-based software will allow you to perform comparative trend analysis using CSS data, your company’s data, and data from other sources with several clicks of the mouse. The Stats Toolkit also makes the necessary adjustments to trend graphs so that both index and dollar data series are comparable on the same graph.
Questions? CSS Participation?
Contact Eric Armstrong at email@example.com or (414) 778-3372.