When calculating percentage changes, where is the base entity placed in the calculation?

When calculating percentage changes, the base entity is placed in the denominator of the calculation. This is because percentage change is determined by comparing the change in value to an original or starting value, which serves as the baseline for the calculation.

To compute a percentage change, you would correctly follow the formula:

[

\text{Percentage Change} = \frac{\text{New Value} - \text{Old Value}}{\text{Old Value}} \times 100

]

In this formula, the old value (base entity) appears in the denominator. This setup allows you to see how much the new value deviates from the old value in relation to the size of the old value. Thus, placing the base entity in the denominator provides clarity on the proportion of the change relative to the starting point, making it possible to express the change as a percentage. This is a standard and widely accepted practice in mathematics and statistics when analyzing growth or decline over time.