When should percentage increase be used instead of absolute change?

Percentage increase should be used instead of absolute change when you need to compare growth across different scales or starting points. Absolute change (the raw number) tells you "how much", but percentage increase tells you "how significant" that change is relative to the size of the entity.

Formula

Use Percentages When Comparing:

• Small vs. Large Companies (e.g., revenue growth)
• Different Currencies (e.g., stock gains in USD vs EUR)
• Different Time Periods (e.g., inflation in 1990 vs 2024)

Worked Example

• Invest A: Gains $10 on a $10 investment. (100% return)
• Invest B: Gains $10 on a $1,000 investment. (1% return)

Result: Absolute change ($10) is identical, but percentage increase reveals Investment A was far more efficient.