~1 min read
What Is Percentage Change?
Percentage change measures how much a value has increased or decreased relative to its original:
Percentage Change = (New Value - Old Value) / |Old Value| × 100
Positive = increase. Negative = decrease.
Common Applications in Business
- Revenue growth: "Revenue grew from $800k to $1M — what's the growth rate?" → 25%
- Cost reduction: "Costs dropped from $50k to $40k — what's the savings %?" → 20%
- Price changes: "We raised prices from $49 to $69 — by how much?" → 40.8%
CAGR vs Simple Percentage Change
For multi-year comparisons, Compound Annual Growth Rate (CAGR) is more meaningful:
CAGR = (End Value / Start Value)^1 / n - 1
A revenue that grew from $1M to $2M over 5 years is a 100% total change, but only 14.87% CAGR.