



 
Hi, The expression $\large \frac{x  y}{y}$ expresses the increase in profit over last year $(x  y)$ as a fraction of last year's profit $y.$ You then manipulated this expression and showed that $\large \frac{x  y}{y} = \frac{x}{y}  1$ and asked for the significance of the number 1. Maybe it is more natural to think of this using percentages. For example if your profit last year was $y = \$20,000$ and your profit this year was $\$25,000$ then $\large \frac{x  y}{y}$ yields $\frac14 = 0.25$ so your profit this year increased 25% over last year. On the other hand $\large \frac{x}{y}$ yields $\frac54 = 1.25$ or said as a percentage that's 125%. Thus your profit this year is 125% of your profit last year. That's a 125%  100% = 25% increase. I hope this helps,  


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