# How to Calculate Percentage of Increase

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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.

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.

#### Tips

• 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.