How to calculate percentage of increase

Written by nicole harms
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How to calculate percentage of increase
(per cent icon image by Dmitri MIkitenko from Fotolia.com)

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.

Skill level:
Easy

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Things you need

  • Calculator

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Instructions

  1. 1

    Note your starting number. For example, in the first six months of last year, you spent £3,250 on advertising.

  2. 2

    Compute the number for that same category in current dollars. This year, your advertising expenditures for that same period are £3,575.

  3. 3

    Subtract the old number from the new number. In this case, £3,575 minus £3,250. You had an increase of £325.

  4. 4

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

Tips and 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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