In percentage calculations, how is the entity experiencing change treated?

When working with percentage calculations, the entity experiencing change is treated as the numerator because it represents the part of the whole that is being evaluated or assessed. The percentage is a way of expressing the change relative to a base value or whole.

For example, if a company’s revenue increases from $100,000 to $120,000, the increase of $20,000 is the change we are interested in. To find the percentage increase, we take the change ($20,000) as the numerator and divide it by the original amount ($100,000), which serves as the denominator. The formula for percentage change is:

[

\text{Percentage Change} = \left( \frac{\text{Change}}{\text{Original Value}} \right) \times 100

]

This framework clearly illustrates how the change is evaluated in relation to the original figure, thus positioning it as the numerator in the calculation. Understanding this relationship is crucial for accurate percentage computations, be it for finance, statistics, or any other field that relies on percentage changes.