![]() Hence, it can help authorities redefine their regulations and policies as necessary It is a tool countries use to measure inflation.This index helps companies forecast market trends and stay competitive by tracking the price changes of their products.Hence, there has been an increase in prices by 22% since 2016. Wholesale Price Index Calculation & Examples The remaining 13.15% entails goods like fuel and power.Next comes the primary components: food and non-food articles, minerals, natural gas, and petroleum.It constitutes 64.2% of the total percentage The major components include manufactured goods such as automobiles, machinery, electronics, metals, chemicals, and textiles.Where small countries prepare WPI for 100-200 products, large countries include thousands of products.They are also subject to change to better reflect the current state of the economy It includes commodity prices, but the products vary by country.Hence, they subtract 100 from the obtained result to determine the growth percentage The index value for the base year is equal to 100 at all times.After collecting information, they use the WPI formula (Current year price/base year price) to compute the index value.The base year changes approximately every ten years, sometimes sooner if necessary. The base year for this index is 2011-2012. Economists gather data on the prices of goods from the current year as well as a base year.However, it is beneficial for companies wanting to project future goods prices. As it is not accurate, most countries prefer CPI over it.To calculate, divide the good’s current price by its price in the base year and multiply the result by 100.However, instead of this, the United States began using a detailed producer price index (PPI) in 1978 It is one of the country’s inflation indicators.A wholesale price index (WPI) measures the difference in prices for goods sold in bulk over a period.Advantages & Disadvantages Wholesale Price Index. ![]() Wholesale Price Index Calculation & Examples.Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others Table of Contents
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