There are two different ways to calculate percentage change in Excel, and people can be pretty adamant about which way is better. Let me show you both.
First, what do I mean by “percentage change”? I'm just talking about the difference between an old value and a new value expressed as a percent.
For example, if I started with $5 and I invested it so that now I have $10, the percentage change would be 100% because I added the entire beginning amount to my balance. On the other hand, if I had lost $1 of my original $5, my percentage change would be -20% because 1 is 20% of 5.
Calculating Percentage Change – Method #1
The first way to go about calculating percentage change is to subtract the old amount from the new amount and then divide that by the old amount.
Calculating Percentage Change – Method #2
The second way is to divide the new amount by the old amount and then subtract 1.
Both methods will result in the exact same answer, and you'll be able to see the percentage the amount has changed by.
Is one method better than the other? Not really! Method 2 is a little shorter to write because no parentheses are needed. Other than that, there's not much advantage to using one over the other. It's up to you.
Tell me, which way do you prefer? Leave a comment and let me know.