What is Percent Change?
Percent change measures the relative difference between an old value and a new value, expressed as a percentage. It can show either an increase or decrease depending on whether the new value is higher or lower than the original.
This calculation is widely used in finance, economics, statistics, and everyday life to track how values change over time.
How to Calculate Percent Change
Follow these detailed steps:
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Step 1: Find the Difference
Subtract original from new value: New - Original. This preserves direction - positive means increase, negative means decrease.
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Step 2: Calculate Relative Change
Divide the difference by original value. This normalizes the change relative to your starting point.
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Step 3: Apply Percentage Conversion
Multiply by 100 to get percentage. The sign tells the story: +15% is growth, -15% is decline.
Formula
Percent Change = ((New Value - Original Value) / Original Value) × 100%
A positive result indicates an increase, while a negative result indicates a decrease.
Example
Stock Price Change Example
Problem: A stock price changed from $50 to $65. What is the percent change?
Solution:
- Difference: $65 - $50 = $15
- Division: $15 / $50 = 0.30
- Percentage: 0.30 × 100 = +30% (increase)
Quick Calculation Tips
- Use percent change when direction might vary
- For consistent tracking, always use the earlier value as 'original'
- Percent change can be negative (decrease) or positive (increase)
- Great for dashboards and automated reporting systems
Common Mistakes to Avoid
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Swapping original and new
Always: New - Original. Swapping gives the wrong sign for your answer.
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Using absolute value incorrectly
Don't use absolute value - the sign tells you increase (+) or decrease (-).
Frequently Asked Questions
What's the difference between percent change and percent difference?
Percent change compares a new value to an original value, showing direction (increase/decrease). Percent difference compares two values without considering which came first.
Can percent change be negative?
Yes! A negative percent change indicates a decrease from the original value. The sign tells you the direction of change.
When should I use percent change?
Use percent change when tracking changes over time, like price changes, population growth, or investment returns where you have a clear "before" and "after" value.