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.
Instructions
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.
Note your starting number. For example, in the first six months of last year, you spent $5,000 on advertising.
Compute the number for that same category in current dollars. This year, your advertising expenditures for that same period are $5,500.
Subtract the old number from the new number. In this case, $5,500 minus $5,000. You had an increase of $500.
Divide the increase ($500) by the original starting number ($5,000). The resulting decimal, 0.10 or 10 percent , is the percentage increase from last year to this year. The same formula applies to decreases.
Tips
Tips
- 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.
About the Author
Nicole Harms has been writing professionally since 2006, specializing in real estate, finance and travel. When she's not writing, she enjoys traveling and has visited several countries, including Israel, Spain, France and Guam. Harms received a Bachelor of Science in Education from Maranatha Baptist Bible College.
Photo Credits
percent icon image by Dmitri MIkitenko from Fotolia.com