How to Calculate Percentage Gains

Video: How to calculate your percentage gains or lost in your trade

Content

Steps
Method 1 of 3: Collecting the required cost data
Method 2 of 3: Calculating Percentage Value Gains
Method 3 of 3: Practical Application of Percentage Value Gains Information
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Since prices are currently rising for almost all commodities, to make forecasts for the future or simply for financial accounting purposes, you may need to be able to calculate this increase mathematically. It will be helpful to learn how to determine the percentage increase in the cost of goods that you regularly purchase for personal use or for business purposes, especially if you need to budget for a company or your family, or just help someone understand the principles of budgeting (for example, teach your children how to budget) ... To calculate the percentage increase in value for one or more goods, you will need to find out data about its current and previous value, and then perform some simple calculations.

Steps

Method 1 of 3: Collecting the required cost data

1 Remember the previous price of the item. The easiest way will be to independently remember the previous price of the product. You may have bought a product at a grocery store or mall for the same price for a long time. This item can be a staple in your weekly grocery store or basic clothing you purchase regularly. For example, imagine that it took you a long time to purchase one liter cartons of milk for 55 rubles. This price will represent the previous value of the value for calculating its increment as a percentage.
2 Check the current price of the item. If the price of the product you are buying has increased, then you can calculate the increase in its value as a percentage. However, you will first need information about the new price. For example, suppose the price of a regularly purchased carton of milk has increased from 55 to 60 rubles. Now you can calculate the percentage increase in value to understand how much the price has increased in relation to its previous value.
- Make sure that both prices (old and new) refer to the same product before proceeding with the calculation. If a product has changed for the better in any way, the change in its price cannot be directly compared.
3 Examine historical data on the value of the product. In some cases, it is simply impossible to independently recall the previous cost of the goods. For example, when you need to calculate the cost gain in relation to a very long time value, or when the calculation is needed for a product that you have never bought, you will need to obtain historical cost data from other sources. The same applies to calculations for various value indicators (rather than specific goods), for example, for the consumer price index, average consumer prices in Russia and the purchasing power of the Russian ruble.
- In these cases, you will need to conduct a self-study on the Internet to find out the previous values of the cost (or indicators). Try to search for the name of the product, the year you are interested in and the word "price" or "cost" to find the necessary data for the period you are interested in.
- For example, information on consumer prices from 1991 to the present can be found on the website of the Federal State Statistics Service.
4 Find information about the current value of the item. For any historical value data, you will also need to know the current value of the item in order to be able to compare these values. Try to find out the most recent cost data for the product or metric you are going to analyze. At the same time, do not compare products with each other, which, for example, differ in different levels of quality or a set of specific features. Use the latest information from the current year for your calculations.

Method 2 of 3: Calculating Percentage Value Gains

1 Understand the formula for calculating percentage gain. The formula for calculating the percentage increase allows you to express as a percentage the increase in the current value of the product to its previous value. In writing, the formula for calculating the percentage growth rate is as follows: ${ displaystyle { text {Tnp}} = { frac {({ text {C1}} - { text {C0}})} { text {C0}}} times 100 \%}$ , where C1 and C0 are the new and old cost of the product. Multiplication by ${ displaystyle times 100 \%}$ at the end of the formula allows you to convert the growth rate from decimal fractions to percentages.
2 Subtract the old value from the current one. Start by plugging your data into a formula. Then simplify the look of the formula by calculating the difference between the current and previous value of the item in the numerator.
- For example, if you previously paid 55 rubles for a package of milk, but now it costs 60 rubles, you need to subtract its previous value from the last price, and you will get a difference of 5 rubles.
3 Divide the value of the change in value by its previous (historical) value. The next step is to divide the result obtained in the previous step by the previous price of the product. As a result, you will calculate the so-called growth rate, presented as a proportion in relation to the old value of the product.
- If you use the above examples, you will need to divide 5 rubles by 55 rubles (the old price of a carton of milk).
- You will end up with a non-monetary score of 0.09.
4 Convert the calculation result to a percentage. Multiply this value by 100% to find out how much the value of the item has changed in percentage terms. The final result will tell you how many percent of the old price was the increase in the value of the goods to its current price.
- In the given example, the calculation will be as follows: ${ displaystyle 0.09 times 100 \%}$ , which will amount to 9%.
- So, according to the results of calculations, it became clear that the current cost of a liter pack of milk increased by 9% in relation to its previous cost.

Method 3 of 3: Practical Application of Percentage Value Gains Information

1 Calculate the increase in your personal spending. The results of calculations for the increase in the value of goods can be used to calculate the increase in costs. In addition, you can monitor the change in value indicators over time and see the prices of which products are growing faster or slower than others. After that, you can compare the increase in the prices of goods with the increase (or decrease) in your income in order to raise how adequate the increase in your wages is to the current cost of living.
2 Keep track of cost increases when running your business. Businesses can use percentage increases in costs to determine their impact on expected or actual profitability. This information can be useful for assessing the effect of savings from changing suppliers or for justifying increases in selling prices for their products. For example, if a company sees that the price of a certain manufacturing material is constantly increasing, it can look for an alternative material or another supplier. Or the business can raise the prices of its own goods accordingly.
3 Calculate the value added for collectible items. Collectible items such as vintage cars, watches and paintings can increase in value over time. The increase in their value can also be estimated as a percentage using the same formula. All you need to do is compare the old and current value of the collectible. For example, if in 1965 the Mayak table clock was sold, for example, at 14 rubles, now they are already being resold at a price of 1000 rubles or more (depending on the state), which indicates a growth in value of 7043% (and this still excluding the denomination of the ruble in 1998).
4 Use the percentage gain formula to calculate other metrics. The same calculations and formulas can be used in a number of other calculations.The formula specified in the article can be used to estimate the percentage deviation (between the expected and the actual value of the indicator), to determine the percentage change in indicators between two periods of time, or simply to compare two numbers.