Ratio or average of ratios expressed as a percentage is called an index number. Index numbers are used to measure changes over time in economic, financial or statistical data. They are used to compare the changes in a particular variable over time or between different regions or countries.

There are different types of index numbers such as price index, quantity index, cost of living index, and stock market index. Index numbers are useful in making economic decisions, forecasting trends, and analyzing the performance of different sectors or industries.

Index numbers are expressed in percentage terms and are calculated by dividing the current value of a variable by the base value and then multiplying the result by 100. The base value is usually taken as 100, which represents the starting point or the reference point for the index.

For example, let's say the price of a commodity was $100 in the base year and it increased to $120 in the current year. The index number for this commodity would be calculated as follows:

Index number = (Current value/Base value) x 100
Index number = ($120/$100) x 100
Index number = 120

This means that the price of the commodity has increased by 20% over the base year.

In conclusion, index numbers are a useful tool for measuring changes over time in economic and financial data. They are expressed as a percentage and are calculated by dividing the current value by the base value and multiplying the result by 100. Index numbers are used for making economic decisions, forecasting trends, and analyzing the performance of different sectors or industries.

An index no.