Calculating Percentage Change Video

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This video shows you how to calculate a percentage change in Excel. A percentage change is always calculated from a baseline or index value which is considered to be 100%. If the second value is 110% of the first then we consider it to be 10% more. If it's 90%, we consider it to be 10% less. That means we subtract 100% from whatever figure we get when we divide the new value by the baseline.

In the screenshot of the video, you can see we divide the figure in B2 by the previous year's figure in A2. This tells us the later figure is 102% of the previous year. Subtracting 100% gives us a percentage change of 2%. The mathematical understanding required is that '100%' is simply another way of saying '1' and the two are interchangeable both in the formula bar, and in the displayed result. If the percentage formatting in cell C2 was changed to number formatting, the output would display 0.02.

The most common pitfalls our experts see when using Excel to identify a percentage change are in selecting the wrong baseline as a 25% rise in one direction is equivalent to a 20% fall in the other direction. The other issue is that you have to decide if you want to use the same baseline year-after-year, or a rolling baseline and add appropriate $ symbols around the references in the formula. The latter can be a problem if you are simply copying a formula supplied by AI into one cell, and assume you can then copy to all cells in a table.