What is Relative Change?
Relative change expresses the change between two values as a proportion or percentage of the initial value. It's useful for comparing changes across different scales.
Formula
Relative Change = (Final Value - Initial Value) / Initial Value
Multiply by 100 for percentage form.
Understanding the Result
- Positive = increase
- Negative = decrease
- 0 = no change
- 1.0 (or 100%) = doubled
- -0.5 (or -50%) = halved
Examples
Example 1: Stock price from $40 to $50
Relative Change = (50 - 40) / 40 = 0.25 or 25%
Example 2: Temperature from 20 degreesC to 25 degreesC
Relative Change = (25 - 20) / 20 = 0.25 or 25%
Applications
- Financial analysis
- Economic indicators
- Scientific measurements
- Performance metrics
- Growth rates
Advantages
Relative change is dimensionless, making it easy to compare changes in different units or scales. A 10% increase means the same thing whether you're measuring dollars, meters, or people.
Caution
Relative change can be misleading when the initial value is very small or zero.
Quick Tips
- Double-check your inputs for accurate results
- Use parentheses to clarify order of operations
- Results are rounded — consider significant figures
Frequently Asked Questions
It's the ratio of change to the initial value.
Absolute change is just the difference; relative change shows it as a proportion.
When comparing changes across different scales or units.
Yes, values greater than 1 mean the final value is more than double the initial.
Relative change is undefined when dividing by zero.
Yes, percentage change is relative change expressed as a percentage.