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

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## Instructions

- 1
Note your starting number. For example, in the first six months of last year, you spent £3,250 on advertising.

- 2
Compute the number for that same category in current dollars. This year, your advertising expenditures for that same period are £3,575.

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

- 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%.