What Is Percentage Change?

Percentage change is a calcu♋lation used to assess the relative performance of a stock or other investment over a certain period.

Investors commonly review the percentage change of their portfolio compared to the percent🅰age change of sim🍨ilar investments over the same timeframe.

Percentage change can also be used to꧙ assess the change in the financial value of any item—from the increase in the pr🍨ice of eggs from one month to the next, to how much a car costs today compared to what it cost a year ago.

How Percentage Changes Work

Percentage changes can be 💜calculated for a variety of variables for any items that you wish to measure over time.

For example, people might be interested in the percentage change in the amount of rainfall in their area from season to season. Or a baseball fan might want to keep track of the percentage change in the number oꦬf home runs that their favorite team hits yearly.

In finance, percentage change is often used to track the prices of large market indexes like the S&P 500 and 澳洲幸运5开奖号码历史查询:Dow Jones Industrial Average (DJIA) and individual securities. It's also helpful when comparing the fluctuating values of different nations' 澳洲幸运5开奖号码历史查询:currencies.

Percentage change is also a widely used metric in business, such as when a company illustrates its revenue growth 澳洲幸运5开奖号码历史查询:year over year (YOY) in its 澳洲幸运5开奖号码历史查询:balance sheet.

Starbucks Financial Results

Often, if there is a significant percentage change, the company will try to explain why. For example, for the third quarter of 2020, Starbucks reported a 38% drop in net revenues over the same quarter in 2019 "due to the adverse impact of COVID-19."

Subsequent quarterly reports showed the gradual recovery of Starbucks' revenues and positive percentage changes in net revenues, as the business disruptions caused by COVID-19 diminished.

Moving on, Starbucks' 2024 announcement of Q4 and full fiscal year 2024 results noted total net revenues for the 2024 and 2023 fiscal years as $36.2 billion and $35.98 billion, respectively. The increase year-over-year was a positive percentage change of 0.6%.

Formula and Calculation of Percentage Change

To calculate a percentage increase, first determine the difference (increase) between the two numbers you are comparing:

$\begin{aligned}\text{Increase}=\text{New Number}-\text{Original Number}\end{aligned}$Increase=New Number−Original Number​

Next, divide the increase by the original number and multiply t🔥he answer by 100:

$\begin{aligned}\text{Percentage Increase}=\left(\frac{\text{Increase}}{\text{Original Number}}\right)\times100.\end{aligned}$Percentage Increase=(Original NumberIncrease​)×100.​

This expresses the chaജn♏ge as a percentage—i.e., the percentage change.

Similarly, to calculate a percentage decrease, determine the difference (decrease) between the two numbers you are𒉰 comparing.

$\begin{aligned}\text{Decrease}=\text{Original Number}-\text{New Number}\end{aligned}$Decrease=Original Number−New Number​

Next, divide the decreas🃏e by the original number and multiply the answer by 100.

$\begin{aligned}\text{Percentage Decrease}=\left(\frac{\text{Decrease}}{\text{Original Number}}\right)\times 100\end{aligned}$Percentage Decrease=(Original NumberDecrease​)×100​

Again, the result expresses the cha⭕nge as a percentage—i.♐e., the percentage change.

Uses of Percentage Change

Investors, companies, and enti🍨re industries can benefit from analyzing how prices or other measures rise or fall from🐬 one period to the next.

Here are some ways that investors can use percentage change calculations 🍌to their advantage:

• Measure individual investment returns: The return on investment (ROI) for various assets, such as stocks, bonds, or mutual funds, is expressed in terms of percentage changes. This helps investors evaluate the performance of their assets over a particular time frame and compare them to other possible investments.
• Evaluate portfolios: In addition to computing the percentage changes of individual assets within a portfolio, investors can compute the change for their entire portfolio. This can be useful in determining whether their current 澳洲幸运5开奖号码历史查询:asset allocation is delivering the returns they need or whether they should consider 澳洲幸运5开奖号码历史查询:rebalancing.
• Analyze price movements: Percentage changes in the prices of stocks, commodities, or other financial instruments can also help identify trends, 澳洲幸运5开奖号码历史查询:volatility, and potential trading opportunities.
• Compare against benchmarks: Investors can check the percentage changes in their investments against the percentage changes in a corresponding stock index or other 澳洲幸运5开奖号码历史查询:benchmark to see whether their holdings are outperforming or underperforming the market. If they are significantly underperforming the benchmark, you should find out why.
• Manage risk: Investors who use 澳洲幸运5开奖号码历史查询:stop-loss orders to protect themselves from steep declines in the value of an investment can set their targets based on percentage changes.
  

Example of Calculating Percentage Change

Consider Grace, who bought shares of a stock at $35 per share on Janꦓ🅠uary 1 of last year. A year later, the stock was worth $45.50 per share. By what percentage did Grace's share value increase? 

To answer this question, first calculate the increase in price between the new and oldꦏ numbers: $45.50 - $35 = $10.50. Then divide the increase by the original price:

$\begin{aligned}\frac{10.5}{35}=0.3\end{aligned}$3510.5​=0.3​
Finally, to get the percentage, multiply the answer by 100 (or simply move tღhe decimal point two spaces to the right♚).

$\begin{aligned}0.3\times100=30\end{aligned}$0.3×100=30​
Grace's stock increased by 30%.

The Bottom Line

Percentage change is a simple calculation with many uses in ಞfinance and ✅business.

If investors want a quick read on how a particular investment of theirs is perfo🅷rming, they should ▨compare its percentage change in value for the past several years to discern a trend upward or downward.

In addition, the♛y can compare it to that of similar investments, such as a benc🌳hmark index.