Seasonality analysis

Seasonality analysis can be a useful tool to understand the seasonal trends in various P&L account captions (i.e. revenue, gross profit, overheads, EBITDA) or in profitability margins (i.e. gross profit margin, EBITDA margin).

Taking revenue as an example, by visualizing the revenue generated in individual periods on a graph, you can easily identify whether a seasonal trend exists (i.e. are there certain times of year where revenue is typically high or low).

In the attached example, we can see that revenue typically falls away between November and January, but peaks between July and September. October is typically lower, but October 2017 experienced a one-off peak. Performing this analysis enables businesses to better prepare for their peak trading periods and underlines the importance of trying to boost revenue in slower periods (e.g. via customer promotions).

Download Excel File

We have prepared an example piece of seasonality analysis which you can download in Excel form.

 Example of Seasonality Analysis

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