Values change over time or across periods, and that understanding in business, finance, sales, marketing, and even education is paramount. Whether it’s sales, expenses, or website traffic, understanding the percentage change provides an instant, easy to digest meaning about trends and performance change.
Microsoft Excel, being the go-to tool for most analysts and professionals, offers powerful functions and formulas that make this task quick and intuitive. In this comprehensive guide, we will explore the percentage change formula Excel uses, various use cases, and best practices to ensure accuracy.
What is Percentage Change?
Percentage change is a mathematical concept that describes the amount of change over time or between two distinct data points as a percentage. Calculate the percent difference between an old value and a new value, as a percentage of the old value
The generic formula is:
For example, if you want to determine the percentage change between two values you can use the formula:
Percentage Change = [(New Value − Old Value)(Old Value)] × 100.
Think of this simple equation that tells you how much a value has increased or decreased from its baseline.
Why Calculate Percentage Change in Excel?
From a small business owner tracking their revenue to a student analysing scientific data, calculating percent change can help:
- Recognise trends in increases or decreases
- Performance during periods of comparison
- Share metrics with stakeholders
- Visualise data in dashboards and reports
Fortunately, there are simple ways to calculate percent change in excel accurately and quickly using some built-in formulas.
The Basic Percentage Change Formula in Excel
Suppose you have two digits: in excel (say)
- Old Value in Cell A1
- New Value in Cell B1
To obtain the percentage change, you would use this formula = (B1-A1)/A1
If you want to express this result as a percentage, just use the Percentage format (Home → Number group → % symbol), or, multiply the formula by 100 if the output has to stay in a number format.
The basic formula few Excel users can live without to calculate percentage changes.
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Example Scenario: Sales Growth
For example, your sales were $50,000 last year and this year you have $65,000 in sales.
- A (Old Value) = 50000
- B (New Value) = 65000
Use the formula in Cell C1: = (B1-A1)/A1
This gives:
This gives us (65000 − 50000)/50000 = 0.3 or 30%.
This means there is 30% more sales for you. Just do the % formatting to see it right, e.g. “30%”
How to Calculate Percent Difference Using Excel Formula
Though commonly mistaken for percent change, percent difference is typically the relative comparison between two values, regardless of which value came first.
Here is the Excel formula of percent difference.
= ABS(B1-A1)/((B1+A1)/2)
This is particularly helpful when there is no natural “beginning” or “end” value for either, for instance, when we compare the test scores of two different students.
Example:
- A = 80
- B = 100
=ABS(100-80)/((100+80)/2)21 or 90.222=0.222 or 22.2%
That means there is 22.2% difference between both values.
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Common Use Cases to Calculate Percent Change in Excel
1. Monthly Revenue Tracking
Let’s say your January revenue is in Column A and February revenue is in Column B. You can use the percentage change formula to see how much the revenue has increased or decreased month-over-month.
=(B2-A2)/A2
Drag this formula down to apply it to an entire list of months.
2. Website Traffic Growth
Track traffic from analytics reports by comparing sessions from different periods:
=(CurrentMonthTraffic – LastMonthTraffic) / LastMonthTraffic
Apply formatting to show the result as a percentage.
3. Expense Control Analysis
Use percentage change to analyse how your operating costs have varied:
=(NewExpense – OldExpense)/OldExpense
This instantly helps you identify whether your expenses are trending upward.
Read More:- What is Year Over Year (YOY) in Finance
Excel Formatting for Percentage Change
Even if your formula is correct, improper formatting can lead to confusing results.
Steps to Format as Percentage:
- Double Click on the formula cell.
- Go to the Home tab.
- Click on the % icon under the Number group
- Use the buttons Increase Decimal or Decrease Decimal to change the precision.
Optional: Multiply by 100
If you want to skip those % formatting and just provide the answer to be multiplied by 100:
= ((B1-A1)/A1)*100
However, this is usually far less preferred; for one, Excel already has built-in formatting that is highly dynamic and easier to use.
Handling Negative Numbers and Zero
When Values Decrease
The result will come back negative if your new value is smaller than your old one.
Example:
- Old Value = 100
- New Value = 80
Formula:
- = (80-100)/100 = -0.20 or -20%
This shows a 20% decrease.
When the Old Value is Zero
That’s a little touchy as really, you can’t divide by 0.
Example:
- Old Value = 0
- New Value = 500
Formula:
- = (500-0)/0 → #DIV/0! error
Once again to avoid this tackle an IF:
- =IF (A1=0, “N/A”, (B1-A1)/A1)
This tells Excel to show N/A before raising an error.
Following visualising in Excel percentage changes
Because Excel math formulas often output a number, combining these with some visual tools, such as conditional formatting, data bars, or line charts helps you interpret percentage differences at once.
Use Conditional Formatting
- This formats the percent changes in the cells,
- Scroll over to Home → Conditional Formatting → Colour Scales.
- Select the 3 colours: red for decrease, yellow for no change, green for increase
- This gives you a heatmap-like insights into trends almost immediately.
Automating Reports Using Percentage Change Formulas
By embedding the percentage change formula Excel uses into your templates, you can automate financial dashboards or weekly reports.
For scalable reports, use dynamic referencing, either through named ranges or using INDEX/ OFFSET to always refer to the latest entry.
This formula compares the last two values entered in column B.
Use Excel Math Formulas
There is more to excel than just numbers. Big: Excel math formulas use clear formatting and cohesive analysis to address:
- Quarterly sales performance
- Budget variance reports
- Stock portfolio changes
- HR attrition rate changes
- Academic grade comparisons
Debugging Percentage Errors
- Incorrect Sequence of Values: Old needs to be subtracted from the new, NEVER the other way around.
- Missing Parentheses: If math order is important! Always apply the formula as (B1-A1)/A1, instead of B1-A1/A1
- Not Formatting Percentages: This ends up being confusing because interpreters read decimals.
- Never Attempt to Divide by Zero: Always protect with IF(A1=0, … ).
Final thoughts
If you know how to calculate percent change in Excel, you have a power over data. These formulas are essential for any business analyst, accountant, student or data professional due to their scaling capability, ranging from monthly reports to long-term trend tracking.
Here’s a quick recap:
- The formula for percentage change is =(New Value – Old Value)/Old Value.
- Percent Difference: =ABS(A-B)/AVERAGE(A,B)
- Use format to display the value as a percentage
- Use IF conditions to prevent divide-by-zero errors
- Use Excel built-in charts or conditional formatting to visualise changes.
The percentage change formula Excel provides is easy, scalable, and can be very powerful with the appropriate format and logic. These Excel math formulas will become second nature with practice rendering turn numbers into raw action in just a couple of clicks.
