Revenue percent change is the rate of increase (or decrease) of income in a given period. This could be used to estimate income for a household or a company. The rate of change can only be measured for a specific period in the context of previous periods. The expression of change in the revenue has to rely on the existence of other data, against which the studied data can be compared. As with many accounting tasks, it is better to perform this calculation in a spreadsheet.
Open the spreadsheet program. Any spreadsheet package will do, so choose the package with which you are more familiar. If you already have your revenue figures in a spreadsheet, open that workbook and add an extra column to your figures.
Prepare the data. Your base data needs to be collated in the time series you want to use for the calculation. If you want to measure revenue percent change per year, but your data expresses company figures per quarter, open another sheet in the workbook and write your income in a column per year. If you do not already have your source data in a spreadsheet, start off by entering two columns, one for the year and the other for revenue. Put headings at the top of each column -- “Year” and “Revenue.”
Add another column to the table. Give the new column the heading “Percent Change.” Now you have three columns in the table -- “Year,” “Revenue” and “Percent Change.” Make sure you have a revenue figure for each year you want to calculate the revenue percent change for.
Implement the formula for the “Percent Change” column. As row “1” is taken up with column headings, your first revenue data is in cell “B2.” You cannot calculate the percent change for the first year, because you need a previous period to perform the calculation. Therefore, cell “C2” will remain blank. The first year you can calculate is in row “3,” so click in cell “C3”. You need to express the difference between the current year and the previous year as a percentage of the previous year’s revenue. The previous year’s figure is in cell “B2” and the current year’s amount is in “B3” so subtract last year from this year, divide the result by last year and multiply by a hundred. Enter “=(B3-B2)/B2*100” (without the quotes) in cell “C3.” Press “Enter” to see the revenue percent change.
Format the column to limit the number of decimal places in the displayed result. Click on the “C” at the top of the column to highlight the whole column. Follow the formatting procedures for your spreadsheet package. In Excel you would need to set the data type to “Number,” click on the Format options for that cell type and set the decimal places to 2. Click on “OK” to close the “Format Cell” window.
Copy the formula to all the other rows in the table. Click on cell “C3.” This will show a box around the result and the box has a small square in the bottom right-hand corner. Put the mouse pointer over that square and press down the left mouse button. Hold the button down while you drag the pointer to the last row in your data. This will extend the box down the column so it covers all the rows in the “C” column against which the “A” and “B” columns contain data. Release the mouse button and the spreadsheet will fill in all the remaining rows in column “C” with the revenue percent change formula.
Click in any one of the newly populated cells in column “C.” You will see that the spreadsheet has adjusted the formula to account for the different location in the spread sheet. In each instance, the “B3” in the formula will have changed to the current row number and the “B2”s will have changed to the number of the row above the current row.
If you don’t have a spreadsheet, calculate the change manually. Given that X is last year’s revenue and Y is this year’s revenue, calculate (Y-X)/X*100
Tips and warnings
- If you don’t have a spreadsheet, calculate the change manually. Given that X is last year’s revenue and Y is this year’s revenue, calculate (Y-X)/X*100