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The Finance Base
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How to Calculate Percentage Change for Stocks and Investments

Use the percentage-change formula to measure a gain or loss relative to its starting value—and know when price change differs from investment return.
From TheFinanceBase Team3 min to read
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Calculate percentage change by subtracting the starting value from the new value, dividing by the starting value, and multiplying by 100. For an investment, that result describes the change relative to the starting amount; it is not necessarily the investment’s total return.

How to calculate percentage change

Percentage change = ((new value − old value) ÷ old value) × 100. The old value is the base of comparison. A positive result is an increase; a negative result is a decrease.

For example, if a stock price rises from $95 to $105, the change is $10. Divide $10 by the starting price of $95, then multiply by 100: the price increased by approximately 10.5%. This is an illustrative calculation, not a statement about a particular stock’s market performance. Corporate Finance Institute explains the equivalent formula and spreadsheet approach.

Use the formula in a spreadsheet

Divide the new value by the old value, then subtract 1: new value ÷ old value − 1. Format the result as a percentage. For instance, a result of 0.10526 displays as about 10.5% when formatted as a percentage.

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When the starting value is zero

The ordinary formula is undefined if the old value is zero, because it requires division by the starting value. Report the actual change or explain the context instead of presenting a conventional percentage change.

How to interpret an increase or decrease

A percentage change is relative to its starting value, not a fixed number of dollars. That is why equal dollar gains can represent different rates: FINRA illustrates a $5 gain as 16.67% of a $30 investment, but 8.33% of a $60 investment. FINRA’s rate-of-return guide explains how the investment base affects comparisons.

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Percentages also use a changing base over time. A 10% rise followed by a 10% fall does not bring a value back to where it started: after a 10% rise, a 10% decline is calculated from the higher value.

Price change versus investment return

A stock’s percentage price change measures the movement in its quoted price. It does not automatically include dividends, interest, fees, or taxes. FINRA describes total return as the gain or loss in an investment’s value plus investment earnings; costs can affect the investor’s net result.

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Simple holding-period return

When there are no additional cash flows, calculate the holding-period return as (ending value − beginning value) ÷ beginning value. To calculate total return, include income received during the period, such as dividends or interest. State whether fees and taxes are deducted or treated separately. FINRA discusses rate of return and investment earnings, and Corporate Finance Institute explains holding-period return.

Annual return and CAGR

Investor.gov defines annual return as profit or loss over a one-year period. Multiplying a monthly return by 12 expresses a simple annual rate often called APR; it does not account for compounding. Investor.gov’s annual-return definition distinguishes this convention.

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For a multiyear period, the compound annual growth rate (CAGR) is the smoothed annual rate implied by the beginning and ending values:

CAGR = (ending value ÷ beginning value)^(1 ÷ number of years) − 1.

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CAGR reflects compounding and is not the cumulative percentage change divided by the number of years. It describes the constant annual rate that would connect the two endpoints; it does not show the investment’s actual year-by-year path. This endpoint formula also does not fully account for interim deposits or withdrawals, where the timing of cash flows affects the result. Corporate Finance Institute explains CAGR.

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How to compare investment performance fairly

Before comparing two investments, make sure the figures use the same kind of return and a comparable period. A percentage without its measurement period, calculation basis, and treatment of costs can give a misleading impression.

  • Period: Compare the same holding periods, or identify the annualization method.
  • Return measure: Distinguish price-only change from total return that includes investment income.
  • Costs: State whether figures are gross or net of fees and taxes.
  • Base: Show the amount invested or the reference value behind the percentage.
  • Comparison: Identify the relevant benchmark or comparison group when making a performance claim.

The SEC’s Investor Bulletin advises readers to understand how performance claims are calculated and presented. It also cautions that “Past performance does not necessarily predict future results.” SEC Investor Bulletin: Performance Claims (September 15, 2022).

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