Linear trend expresses the function: y=ax+b, gdea – the value that will be increased the following value in the time series;x is the period number within a certain time range (for example, month number, day, or quarter);y – a sequence of analyzed values (sales for month);b – the point of intersection, which on the graph will intersect the y-axis (the minimum level).In this case, if the value a is greater than zero, the dynamics of growth will be positive. In turn, if a is less than zero, the dynamics of a linear trend will be negative.
Use linear trend for forecasting individual time series, whose data is increased or decreased with a constant speed. When constructing a linear trend can use the program Excel. For example, if you require linear trend for forecasting sales for the month, then make 2 variables in the time series (time - months and sales).
The equation of the linear trend you will have the same: y=ax+b, where y is sales, x is months.Plot the data in Excel. On the x-axis you get your time period (1, 2, 3 — months: January, February, etc.) y changes in the volume of sales. Then add the line in the chart trend.
Extend the line of the trend to predict and determine its value. At the same time you must be the only known time values along the X-axis and predicted values you need to calculate with the previously mentioned formula.
Map the obtained predictive values of the linear trend with the actual data. This way you will be able to determine the sales growth percentage.
You can adjust the projected values of the linear trend in the case if you are not satisfied with growth, ie you understand that there are components that may influence it. If you change the value of "a" in the linear trend y=ax+b, then you can increase the slope of the trend. So you can change the slope of the trend, level trend, or simultaneously these two indicators.