Question

Amos Bundy runs a small convenience store. His sales are booming, but he is not quite sure why. He offers three main services: basic grocery sales, ready-to-eat sandwiches, pastries, and coffee, and pizza in three different varieties (cheese, cheese and sausage, and cheese and pepperoni). Since you stop at Amos’s store almost every day for coffee, you offer to help him look at his sales numbers. He has pulled the following information together for you.

Sales Item          January    February       March       April

Grocery sales     1,525.00     1,385.00      1,250.00   1,100.00

Deli and Coffee      950.00        850.00        675.00      550.00

Pizza                        895.00        975.00      1,200.00     1,675.00

REQUIRED: 1. Calculate the absolute change in each category of sales items across the four months of this year. 2. What do the numbers suggest? 3. Calculate the percentage change by offering for Bundy’s store. Start with April and work backward to January. 4. What do these percentages suggest? Does it differ from the information you got when you only used the amount of change in your original analysis? Why or why not?

Answer 1

1. The absolute sales figures for January till Apr

	January	Change	February	Change	March	Change	April		total
Grocery Sales	1525	-140	1385	-135	1250	-150	1100		5260
Deli & Coffee	950	-100	850	-175	675	-125	550		3025
Pizza	895	80	975	225	1200	475	1675		4745
Total	3370	-160	3210	-85	3125	200	3325		13030

2.While going through the absolute number for sales it is observed that the total sales of January is 3370 which goes down to 3210 in Feb to 3125 in March and to 3325 in april thus the total sales remains more or less static from January to April. However, if we go itemwise sales, we observe that grocery sales which was at 1525 in the month of January comes down to 1100 in April and the sales of Deli & coffee too has come down from 950 to 550 from January to April. Of course this decline has been compensated by Pizza sales wlhich increased from 895 in Jan to 1675 in April. Thus the total decline in grocery sales and deli/coffee sales compensated almost by increase in Pizza sales and hence the total sales for April of the firm remain almost equal to January.

3. Itemwise- % Change in Sales monthwise Appri to January

	April	%Change	March	%Change	February	%Change	January		total
Grocery Sales	1100	-12.00	1250	-9.75	1385	-9.18	1525		5260
Deli & Coffee	550	-18.52	675	-20.59	850	-10.53	950		3025
Pizza	1675	+39.58	1200	+23.08	975	+8.94	895		4745
Total	3325	+6.40	3125	-2.65	3210	-4.75	3370		13030

4. When observing the % change in sales from April till Janaury, we observe that there is decline in sales % of grocery 12% in April from march and from february to march decline is 9.75 and January to februay the decline is 9.18%. Similarly in Sales of Deli & coffee also, there is decline of 10.53% (January to Feb) to 18.52% decline in March to April. However, Pizza Sales have been increased from 8.94% (Jan-Feb) till 39.58% in march-April. The total sales decline % in Jan-Feb is 4.75 which has been 6.40% positive in March-April. But if we observe the total % decline in sales from Jan to April is -1.34%.

Conclusion: I think that there is no change in the data as the absolute data if properly understood in % form. However, the way the absolute figures are placed ie from January to April is in proper form in ascending trend ie from the begining. The % figures are desired to be placed from April to January ie in the reverse trend and as such if the % calculations are done in routine manner, then we will observe the reverse signs in % terms ie the positive will be observed to be negative and negative  will be observed to be positive. It will be because, the normal trend is January to April and when the figures are placed in reverse order ie April to Janauary you will certainly observe that from April to march there will be increase but if you see the same figure from reverse angle then you will observe it will be an increrase from March to April. Thus in our view it is only a matter of perception how we are taking and assuming it, otherwise we feel that there is no difference in absolute figures or in percentage figures excepting how we percieve it.