I agree with this approach, mainly because any number like 110% or -110% would be a reasonable number if you had made profit last year. Many presentations don't explicitly show the prior year results, but only show year-over-year results, and a definitive percentage could be mis-interpreted.
At my companies, we used both N/A (not applicable) or n/m (not meaningful) for such considerations where prior year information was negative.
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Russ Porter
Professor of Finance, Sacred Heart University
Ridgefield, Connecticut, USA
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Original Message:
Sent: 04-07-2024 12:58 PM
From: Louella Moore
Subject: Change in profit as a percentage
Might be better to leave blank or NA (not applicable) and provide footnote as the usual changes will be misleading. Could create IF statement to recognize when this is happening and insert the "NA" or similar as text.
Sent from Mail for Windows
Original Message:
Sent: 4/6/2024 11:34:00 PM
From: Xuan Zhao
Subject: Change in profit as a percentage
Hi,
I'm wondering how to calculate the profit changes if it from negative to positive.
For example, if the profit is $-7000 in year 2020 and $+700 in year 2021,the profit changes is [700-(-7000)]/(-7000)*100%=110% ? or 210%?
Are there some methodology to follow in this situation.
Best Regard
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Xuan Zhao
Analyst
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