How to Calculate Percentage Increase in 5 Simple Steps

In business and finance, calculating percentage increase means calculating the percentage of increase between an original price and a new price over a period of time. To do so, you would follow the rules laid down by a percentage change formula specifically tailored to finding a percentage increase instead of a percentage decrease.

Percentage increases help you see how much your financials are improving by a specific metric. For instance, knowing the precise percent difference between how your company’s profit margins or your personal stock portfolio was doing last year and how it’s doing now can be motivating and help you continue to excel. Additionally, you can carry the principle over to another venture, where you can continue to quantify performance and track your financials over a period of time.

Business and financial experts use a few established methods to calculate how much the percentage of an original price has increased over time. Consider using an online calculator or computer program to automate this task. Depending on your preferences, you might find it easier to automate and format cells on a spreadsheet or plug numbers into a calculator. That said, you can calculate percentage increase manually by following these five steps:

1. 1. Define two values. Calculating percentage change—either as an increase or decrease—requires at least two values. There’s an original value or old value (meaning an old number prior to change) and a new value (meaning a new number after change). You’ll need both the first and second number to begin calculating the percentage difference between the two.
2. 2. Subtract old from new. To begin calculating the percentage increase, subtract the original number (O) from the new number (N). This initial value will be your “increase” (I) variable.
3. 3. Divide I by O. Divide this increase variable (I) by the original amount (O). This will leave you with a decimal number (D) so long as I is less than O, which would be inevitable in the case of a percentage increase.
4. 4. Multiply by 100. Multiply the decimal value (D) by 100. Alternatively, you can move the point over two decimal places to the right to achieve the same result. This is your final value (F) unless it comes back as a negative number. Regardless, you will have calculated the absolute value of percentage change, whether the number is positive or negative.
5. 5. Verify a percent increase. After calculating the percent change, you need to verify that there was a percent increase rather than a percent decrease. If the final value is positive, you can rest assured there has been a percent increase. Alternatively, if the final value is negative, you have a percent decrease on your hands.

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