Analysis of time series has a lot of utilities for the various fields of human interest viz: business, economics, sociology, politics, administration etc. It is, also, found very useful in the fields of physical, and natural sciences. Some such points of its utilities are briefly here as under:
(i) It helps in studying the behaviours of a variable.
In a time series, the past data relating to a variable over a period of time are arranged in an orderly manner. By simple observation of such a series, one can understand the nature of change that takes place with the variable in course of time. Further, by the technique of isolation applied to the series, one can tendency of the variable, seasonal change, cyclical change, and irregular or accidental change with the variable.
(ii) It helps in forecasting
The analysis of a time series reveals the mode of changes in the value of a variable in course of the times. This helps us in forecasting the future value of a variable after a certain period. Thus, with the help of such a series we can make our future plan relating to certain matters like production, sales, profits, etc. This is how in a planned economy all plans for the future development are the analysis of time series of the relevant data.
(iii) It helps in evaluating the performances.
Evaluation of the actual performances with reference to the predetermined targets is highly necessary to judge the efficiency, or otherwise in the progress of a certain work. For example, the achievements or out five-Year Plans are evaluated by determining the annual rate of growth in the gross national product. Similarly, our policy of controlling the inflation, and price rises is evaluated with the help of various price indices. All these are facilitated by analysis of the time series relating to the relevant variables.
(iv) It helps in making comparative study.
Comparative study of data relating to two, of more periods, regions, or industries reveals a lot of valuable information which guide a management in taking the proper course of action for the future. A time series, per se, provides a scientific basis for making the comparision between the two, or more related set of data as in such series, the data are chronologically, and the effects of its various components are gradually isolated and unraveled.