A percentage change in stock represents a change in a stock characteristic, such as the increase in the quoted price of a share, that occurs over time. For instance, if you’re tracking the increase in a security’s quoted price, you subtract the share’s original price – the first price considered in the comparison – from the share’s new price, then subtract the original price and divide that remainder by the first price. You then multiply that figure by 100. If, however, you are tracking the decrease in a stock’s quoted price, you subtract the new price from the original price – the first price considered in the comparison – and multiply the remainder by 100.
While these two examples relate to changes to a stock price over time, the formula can be used to track a market index or currency as well. The results of these calculations may appear in comparative financial statements. You can apply the percentage change calculation to any characteristic that you measure over time.
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Steps to Calculate Percentage Increase
To calculate the amount or the degree to which one number increased, perform the following steps:
Step 1. The first step in calculating a percentage increase is to subtract the original number from the new number:
New Number - Original Number = Increase
Step 2. Once you have the difference between the new and original numbers, you divide the increase by the original number. Then, you multiply that result by 100:
(Increase/Original number) x 100 = Percentage Increase
If the outcome of Step 2 is a negative number, the percentage change between the original number and the new number is negative, or the number decreased.
Steps to Calculate Percentage Decrease
To determine the amount that the difference between the new number or the original number decreased, complete the following steps:
Step 1. Calculate the difference between the original number and new number:
Original Number - New Number = Decrease
Step 2. Divide the decrease that you calculated in Step 1 by the original number. Then, multiply that result by 100.
(Decrease/Original Number) X 100 = Percent Decrease
If the result is a negative number, a percentage increase took place.
When determining the percentage increase or percentage decrease for more than one number, use the “Steps to Calculate Percentage Change,” or percentage increase formula. If the outcome is a positive number, a percentage increase occurred. If the outcome is negative, a percentage decrease took place.
Read More: How to Get the Current Stock Price
Stock Price Change Calculation Example
Assume that the price of stock A was $35 in January 2021. In December, the price is $45. To calculate the amount the stock price increased, perform the following three steps:
Step 1. To identify the gain, or percentage change, of an investment, you must identify that investment’s original cost, or purchase price, and its sale price. If you lack the necessary paperwork, check with your brokerage firm and ask for a trade confirmation.
Step 2. The second step in calculating a percentage increase, or gain, is to subtract the purchase price from the sale price:
Sale Price - Purchase Price = Gain or $45 - $35 = $10
Step 3. Once you have determined the difference between the sale and original stock prices, or gain, you divide the increase by the original stock price. Then, you multiply that result by 100:
($10/$35) x 100 = 28.6 percent
The outcome of Step 3 is a positive number, so the difference between the purchase price and the sale price reflects a gain of 28.6 percent on the investment.
If the number was a negative one, indicating the market value was lower than the stock’s original purchase price, you sold the stock at a loss.
References
Writer Bio
Billie Nordmeyer is an IT consultant of 25 years standing. As a senior technical consultant for SAP America and Deloitte Touche DRT Systems, a business analyst, senior staff, and independent consultant, Billie has worked across the retail, oil and gas, pharmaceutical, aeronautics and banking industries. Billie holds a BSBA accounting, MBA finance, MA international management as well as the Business Analyst and Software Project Management certificates from the Cockrell School of Engineering at the University of Texas at Austin.