How to Calculate Percent Decrease: A Step-by-Step Guide
Calculating the percent decrease can be useful in various situations, such as analyzing the reduction in sales or comparing the performance of two products. In this article, we will guide you through understanding and calculating percent decrease with ease.
Step 1: Understand the concept of percent decrease
Percent decrease is a measure that represents the relative change between an initial value (or old value) and a final value (or new value). It indicates how much a particular number has decreased as a percentage of its original value.
Step 2: Identify the initial and final values
Before calculating the percent decrease, you need to identify the two values you will be working with: The initial value (old value) and the final value (new value). These values will help us understand how much change has occurred in a given situation.
For example, let’s say that a store’s monthly sales have decreased from $10,000 to $8,000. The initial (old) value is $10,000, and the final (new) value is $8,000.
Step 3: Calculate the difference between the initial and final values
Next, calculate the difference between these two values:
Difference = Initial Value – Final Value
In our example:
Difference = $10,000 – $8,000 = $2,000
The sales have decreased by $2,000.
Step 4: Divide the difference by the initial value
Now, divide this difference by the initial value to obtain a relative change:
Relative Change = Difference / Initial Value
In our example:
Relative Change = $2,000 / $10,000 = 0.2
The result shows that there has been a 0.2 (or 20% when expressed as a decimal) reduction in sales.
Step 5: Multiply by 100 to get the percent decrease
Lastly, to convert the decimal value obtained in the previous step into a percentage, multiply it by 100:
Percent Decrease = Relative Change * 100
Percent Decrease = 0.2 * 100 = 20
The percent decrease in sales is 20%.
In conclusion, calculating percent decrease helps in understanding the degree of change in various situations. By identifying the initial and final values and following the simple steps outlined above, you can easily determine the percent decrease in any scenario.