How to Calculate Percentage of Increase

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How to Calculate Percentage of Increase
How to Calculate Percentage of Increase

Calculating percentage increases and decreases enables a business owner to keep expenditures in line with income. Nothing paints a quicker picture of your financial health than looking at past and present earnings and expenditures, and nothing shows that more clearly than percentages.

Things You'll Need

  • Calculator
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Instructions

  1. Instructions

    • 1

      Note your starting number. For example, in the first six months of last year, you spent $5,000 on advertising.

    • 2

      Compute the number for that same category in current dollars. This year, your advertising expenditures for that same period are $5,500.

    • 3

      Subtract the old number from the new number. In this case, $5,500 minus $5,000. You had an increase of $500.

    • 4

      Divide the increase ($500) by the original starting number ($5,000). The resulting decimal, .10 or 10 percent , is the percentage increase from last year to this year. The same formula applies to decreases.

Tips & Warnings

  • Use the percentage of increase to evaluate gross margins, cost of goods sold, total revenue and other financial ratios to stay abreast of your company's financial well-being.

  • Compare your company's percentages with those of other businesses in your industry to better understand your competition.

  • Never forget to move your decimal to the right two places before writing your answer as a percent. In this example, .043 = 4.3%.

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  • Photo Credit percent icon image by Dmitri MIkitenko from Fotolia.com

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