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Certified QuickBooks ProAdvisor Bookkeeper Based in Orange County (OC), CA Quickly Fixes Your Small Business QuickBooks Bookkeeping Problems by Expert Hands-on Help in Bookkeeping Services and Small Business Accounting Services, QuickBooks Training and Support, and On-going and Overview Services

Kathy Kalajian, Certified QuickBooks ProAdvisor and QuickBooks TutorThomas Kalajian, BS, CRTP, AVA - California Registered Tax Professional, Accredited Business Valuation Analyst and Qualified Business Development SpecialistIncome Tax Reduction, Audit Deterrence, Penalty Avoidance and Income Tax Preparation

   QuickBooks Small Business Bookkeeping Services and Training

      Small Business Profit Improvement, Value and Competitive Enhancement

 

California Tax Education Council

(949) 583 1040  |  (800) 404 6920

 

Based in Orange County (OC), CA  |  Serving Southern California Since 1976

 

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CPI and Inflation Data

 

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Economic Data

CPI / Inflation Rate

 

Current Consumer Price Index Table

 

Current Inflation Rate Table

 

Source: Financial Trend Forecaster

How Do I Calculate the Inflation Rate?

The following article explains how to calculate the current inflation rate, if you know the Consumer Price Index. If you don't know it, you can find it here

If you don't care about the mechanics and just want the answer, use our Inflation Calculator.

The Formula for Calculating Inflation

The formula for calculating the Inflation Rate using the Consumer Price Index is relatively simple. Every month the Bureau of Labor Statistics (BLS) surveys prices and generates the current Consumer Price Index (CPI).  Let us assume for the sake of simplicity that the index consists of one item and that one item cost $1.00 in 1984. The BLS published the index in 1984 at 100. If today that same item costs $1.85 the index would stand at 185.0

By looking at the above example, common sense would tell us that the index increased (it went from 100 to 185).  The question is how much has it increased? To calculate the change we would take the second number (185) and subtract the first number (100). The result would be 85.  So we know that since 1984 prices increased (Inflated) by 85 points.

What good does knowing that it moved 85 do? Not much. We still need a method of comparison.

Since we know the increase in the Consumer Price Index we still need to compare it to something, so we compare it to the price it started at (100). We do that by dividing the increase by the first price or 85/100. the result is (.85). This number is still not very useful so we convert it into a percent. To do that we multiply by 100 and add a % symbol.

So the result is an 85% increase in prices since 1984. That is interesting but (other than being the date of George Orwell's famous novel) to most people today 1984 is not particularly significant.

calculating a specific Inflation Rate

Normally, we want to know how much prices have increased since last year, or since we bought our house, or perhaps how much prices will increase by the time we retire or our kids go to college.

Fortunately, The method of calculating Inflation is the same, no matter what time period we desire. We just substitute a different value for the first one. So if we want to know how much prices have increased over the last 12 months (the commonly published inflation rate number) we would subtract last year's index from the current index and divide by last year's number and multiply the result by 100 and add a % sign.

The formula for calculating the Inflation Rate looks like this:

 ((B - A)/A)*100

So if exactly one year ago the Consumer Price Index was 178 and today the CPI is 185, then the calculations would look like this:

 ((185-178)/178)*100
or
 (7/178)*100
or
 0.0393*100

which equals 3.93% inflation over the sample year.
 (Not Actual Inflation Rates). For more information you may check the current Consumer Inflation Rate and Historical Inflation Rates in table format. Or if you believe a picture is worth a thousand words you may prefer the Annual Inflation Rate plotted in Chart format.

What happens if prices went down?

If prices went down and we experienced Price Deflation then "A" would be larger than "B" and we would end up with a negative number. So if last year the Consumer Price Index (CPI) was 189 and this year the CPI is 185 then the formula would look like this:

((185-189)/189)*100
or
 (-4/189)*100
or
-0.021*100

which equals negative 2.11% inflation over the sample year. Of course negative inflation is deflation.
  (Not Actual CPI numbers).

Broad Service Areas

Orange County (OC), CA

Aliso Viejo, Orange County (OC), CA ▪  Anaheim, Orange County (OC), CA  ▪  Costa Mesa, Orange County (OC), CA  ▪  Coto De Caza, Orange County (OC), CA ▪  Dove Canyon, Orange County (OC), CA  ▪  Foothill Ranch, Orange County (OC), CA  ▪  Irvine, Orange County (OC), CA  ▪  Ladera Ranch, Orange County (OC), CA  ▪  Laguna Beach, Orange County (OC), CA ▪  Laguna Hills, Orange County (OC), CA  ▪  Laguna Niguel, Orange County (OC), CA  ▪  Lake Forest, Orange County (OC), CA  ▪   Mission Viejo, Orange County (OC), CA  ▪  Newport Beach, Orange County (OC), CA  ▪  Orange, Orange County (OC), CA  ▪  Rancho Santa Margarita, Orange County (OC), CA  ▪  San Clemente, Orange County (OC), CA  ▪  San Juan Capistrano, Orange County (OC), CA  ▪  Santa Ana, Orange County (OC), CA  ▪  Trabuco Canyon, Orange County (OC), CA  ▪  Tustin, Orange County (OC), CA

Riverside County, CA

Corona, Riverside County, CA ▪ Norco, Riverside County, CA ▪ Ontario, Riverside County, CA ▪ Riverside, Riverside County, CA

 

Los Angeles County, CA

Bellflower, CA ▪ Carson, CA ▪ Cerritos, CA ▪ Commerce, CA ▪ Lakewood, CA ▪ Long Beach, CA ▪ La Mirada, CA ▪ Norwalk, CA ▪ Paramount, CA ▪ Redondo Beach, CA ▪ Seal Beach, CA

San Diego County, CA

Carlsbad, San Diego County, CA ▪ Coronado, San Diego County, CA ▪ Escondido, San Diego County, CA ▪ Oceanside, San Diego County, CA ▪ San Marcos, San Diego County, CA ▪ Vista, San Diego County, CA

Service Areas by Zip Code

92656 92698 92801 92802 92803 92804 92805 92806 92807 92808 92809 92812 92814 92815 92816 92817 92825 92850 92899 92811 92821 92822 92823 90620 90621 90622 90624 92624 92625 92626 92627 92628 90630 92629 92650 92609 92610 92708 92728 92831 92832 92833 92834 92835 92836 92837 92838 92840 92841 92842 92843 92844 92845 92846 92605 92615 92646 92647 92648 92649 92602 92603 92604 92606 92612 92614 92616 92618 92619 92620 92623 92697 92709 92710 90631 90632 90633 90623 92694 92651 92652 92637 92653 92654 92607 92677 92630 90720 90721 92655 92690 92691 92692 92658 92659 92660 92661 92662 92663 92657 92856 92857 92859 92862 92863 92864 92865 92866 92867 92868 92869 92870 92871 92688 92672 92673 92674 92675 92693 92701 92702 92703 92704 92705 92706 92707 92711 92712 92725 92735 92799 90740 92676 90680 90742 90743 92678 92679 92780 92781 92782 92861 92683 92684 92685 92885 92886 92887

Additional Service Choices Available

Accredited business valuation and value enhancement services from Provident Valuation Professionals

Please feel welcome to contact Tom at (949) 706 4875

Easy to Get Started

We can go over all the service options with you during an introductory conversation and give you a free, objective service analysis and estimate.  There is no obligation.  Simply contact us or call and ask for Kathy or Tom at 949-583-1040.

 

Provident Financial Services, Inc.

 

Based in Orange County (OC), CA

 

Income Tax Reduction, Penalty Avoidance, Audit Deterrence and Tax Preparation

 QuickBooks Small Business Bookkeeping and Personalized Training

Small Business Profit Improvement, Value Enhancement and Competitive Strategies

 

Secure Correspondence: U.S. P.O. Box 1120, Lake Forest, Orange County (OC), CA, 92609-1120

Located Near Bake Parkway and Jeronimo Road, Lake Forest, Orange County (OC), CA

 

(949) 583 1040  ∙  (800) 404 6920

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We provide the following income tax, bookkeeping and consulting

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Small business profit improvement small business cash flow improvement small business sustainable competitive advantages small business sustainable growth strategies small business value enhancement small business organizational systems and procedures small business strategies to add value to the customer experience small business strategies to release owners from daily maintenance duties to work ON the business instead of IN the business increasing stability of revenue and earnings in small business enterprises improving differentiation of the small business compared to rivals maintaining a higher than average industry gross margin understanding the lifetime value of a customer setting realistic financial objectives, tracking actual performance against planned performance inspiring the team to get on board with a culture of excellence packaging and bundling products and services increasing the average value of the sale understanding the paradigm effect and how it affects the acceptance of new ideas, products, processes and markets increasing the frequency of customer sales improving the financial efficiency of operations establishing and tracking key performance indicators establishing the company's critical success factors developing and implementing an extraordinary guarantee policy for increasing the perceived value to the customer, thereby justifying higher prices, greater loyalty and sustainable competitive advantages nurturing the core values and vision of the founder as the company culture with the team which survives the exit of the founder developing and strengthening the company's core values establishing a realistic mission statement development and adherence to successful policies and practices effective telephone practices and procedures to capture sales opportunities on the spot learning how to let go as the owner/founder dealing with resistance to change amongst the team effective multi-media learning programs for team members and other stakeholders strategic planning and tactical planning with implementation support discovery of key frustrations of both the company's customers and of the industry as a whole to develop effective strategies for remedying these frustrations as a way to create extra value, sustain a premium pricing strategy and create a truly unique selling proposition which undercuts the competition's attempts at price cutting to gain market share crisis management danger condition solutions and strategies to prevent recurrence determination of maximum growth rate sustainable by available and constraints on working capital restructuring debt improvement of cash flow establishing standards and measurement systems for team performance and evaluation organization and implementation of customer advisory board and team advisory board for gathering information   recorded and conducted off-site development, development, clarification and dissemination of the company's USP (Unique Selling Proposition) analysis of the industry's competitive attributes for determining if the industry has good or bad competitors analysis of industry averages for financial performance with key ratios analysis of 5-year trends in stability or volatility of revenue, earnings and cash flow key indicators upon which value is based, including Earnings Before Interest and Taxes (EBIT) and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) appropriate measures upon business value is determined and how to improve the metrics to make your small business equity increase in value and make your business more salable to the highest and best qualified buyer effective strategies to prepare your small business for an appropriate exit developing the depth in management necessary for an effective transition to an Employee Stock Ownership Plan (ESOP) as an exit strategy option.

 

Provident Financial Services provides accounting services not requiring state licensure.

 

Provident Financial Services, Inc. is not affiliated with QuickBooks or Intuit, Inc.  QuickBooks is a registered trademark of Intuit, Inc.

Last updated Wednesday January 06, 2010

 

Experts in Orange County (OC), CA Small Business Bookkeeping and Accounting Services

OC QuickBooks Bookkeeping in Orange County (OC), CA

 

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Last updated Wednesday January 06, 2010