Percentage Change
GeneralPercentage Change
A measure of how much a value has increased or decreased relative to its original value, expressed as a percentage, distinct from a raw difference or percentage points.
Definition
Percentage change measures how much a value has increased or decreased relative to where it started, expressed as a percentage rather than a raw number. The key word is relative, it tells you the size of the change in proportion to the original value, not just the absolute difference between two numbers.
This distinction matters because the same raw difference can represent very different real-world significance depending on the starting point. A $50 increase means much more on a $100 base than on a $10,000 base, percentage change captures that context directly. The Percentage Change Calculator computes this instantly from any two values.
Formula
Percentage Change = ((New Value โ Original Value) / Original Value) ร 100
Worked Example
A stock price moves from $80 to $92.
- Difference: $92 โ $80 = $12
- Percentage change: ($12 / $80) ร 100 = 15%
Compare that to the same $12 increase on a $20 stock, which would represent a 60% change, a dramatically different story despite the identical raw dollar move.
Key Things to Know
- Always divide by the original value, not the new one. Using the new value as the denominator by mistake produces a different, incorrect percentage, this is one of the most common calculation errors.
- Negative results indicate a decrease. A percentage change of โ25% means the value dropped by a quarter of its original amount, not a typo or error in the calculation.
- Not the same as percentage points, despite the similar name. Percentage change is relative, percentage points measure a raw gap between two percentages, mixing them up produces misleading comparisons.
- The same raw change means different things at different starting values. Context matters, always check what the original baseline was before interpreting a percentage change figure.
- Compounding multiple percentage changes doesn't simply add. A 10% increase followed by a 10% decrease doesn't return you to the original value, it lands below it, since each percentage applies to a different base value.
Related Terms
Frequently Asked Questions