Information consists of the differences that make a difference.

I have recently been computing a lot of percentage differences – mainly in variance calculations. I have been using the formula that I was taught in 7th grade, namely

where

*N*is an updated or new number.*O*is the original number.*Δ%*is the percentage change.

I recently discovered that this formula fails miserably when dealing with negative quantities – I had never considered what happens when the *O* variable is negative.

Consider the case when *O* = -4 and *N* = -2. This should reflect a positive improvement of 50%, but instead the sign is negative.

Looks like I have been computing percent differences incorrectly since 7th grade. Here is how I am going to compute percent differences going forward.

I did a bit of googling and some folks prefer to the use the sign instead of the absolute value function in their percent difference formula (example).