Understanding percentage change
The formula
Percentage change is calculated as: (new value minus old value) divided by the old value, multiplied by 100. A positive result means an increase, a negative result means a decrease. Always divide by the starting value, never the ending value.
Common use cases
In finance, this formula measures how a stock price has moved between two dates. In human resources, it quantifies a salary raise from one year to the next. Economists use it to express inflation, that is, the change in the consumer price index over twelve months.
Example
A product went from 80 EUR to 100 EUR. The change is (100 - 80) / 80 x 100 = +25%. Note that if the price drops back from 100 to 80, the decline is only 20%, because the base has changed. This asymmetry often catches people off guard, but it is mathematically correct.