"Yes," Leo smiled. "An index of 1.0 means 'exactly average.' Below 1.0 is low season. Above 1.0 is high season." "Now you can predict next year," Leo said. "First, forecast your total sales for next year using a simple trend—say, you expect 10% growth because you're adding outdoor seating."
"Exactly. That's the 'flat line'—what you'd sell per season if there were no seasons at all." "Now for the magic," Leo said. "For each season, divide its average by the overall average. That gives you the Seasonal Index ."
He drew four boxes on the napkin. "First," Leo said, "write down your total sales for each season for the last two years."
