Calculating percentage increases and decreases enables a business owner to keep expenditures in line with income. Nothing paints a quicker picture of your financial health than looking at past and present earnings and expenditures, and nothing shows that more clearly than percentages.

## Instructions

Note your starting number. For example, in the first six months of last year, you spent $5,000 on advertising.

Compute the number for that same category in current dollars. This year, your advertising expenditures for that same period are $5,500.

## Sciencing Video Vault

Subtract the old number from the new number. In this case, $5,500 minus $5,000. You had an increase of $500.

Divide the increase ($500) by the original starting number ($5,000). The resulting decimal, 0.10 or 10 percent , is the percentage increase from last year to this year. The same formula applies to decreases.

#### Tip

Use the percentage of increase to evaluate gross margins, cost of goods sold, total revenue and other financial ratios to stay abreast of your company's financial well-being.

Compare your company's percentages with those of other businesses in your industry to better understand your competition.