Define: Composite

UK Accounting Glossary

Definition: Composite



What is the dictionary definition of Composite?

Dictionary Definition


  1. A mixture of different components.
  2. A structural material that gains its strength from a combination of complementary materials.
  3. botany A plant belonging to the family Asteraceae, syn. Compositae.

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Full Definition of Composite


A composite, or composite index, is an aggregation of components to produce a broad statistical measure. A stock index, for example, is a composite index as it combines individual stock prices to produce one number that represents the market as a whole. The technique used to calculate the composite number varies; a composite may add values together and apply a multiplier, it may add values together while applying different weights to different components, or it may simply average all the values together. Composites are not limited to stock markets. There are composite indexes for bonds, corporate debt and currency exchange rates. Many economic indicators such as the Consumer Price Index are composite indices. There are even composite indices of composite indices, such as the widely reported Index of Leading Economic Indicators. Benchmarking of professional money managers is often done against a composite. Mutual-fund managers, for example, may have their performance measured relative to the S&P 500 Index.


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Composite. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 27, 2020 https://payrollheaven.com/define/composite/.
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Composite. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/composite/ (accessed: February 27, 2020).
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Composite. PayrollHeaven.com. Retrieved February 27, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/composite/

Definition Sources


Definitions for Composite are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February 2020.