Name: Joseph
Who is asking: Other
Level of the question: All

Question: Hi, I am not sure if my meaning for calculation for a percent change (C-P/P)x100) is correct. In this case, C=10, P=0, does this mean 100 percent increase from previous period? please help

 


Joseph,

Try some different numbers for P.

C = 10, P = 8, percent change (10-8)/8 100 = 25%
C = 10, P = 5, percent change (10-5)/5 100 = 100%
C = 10, P = 2, percent change (10-2)/2 100 = 400%
C = 10, P = 1, percent change (10-1)/1 100 = 900%
C = 10, P = 0.5, percent change (10-0.5)/0.5 100 = 1900%
C = 10, P = 0.1, percent change (10-0.1)/0.1 100 = 9900%

As P gets close to zero the percentage change gets very large. When P is actually zero then the concept of percentage change has no meaning.

Harley