# Calculate percent variance

=(new-baseline)/baseline

To calculate a percent variance, subtract the original (baseline) number from the new number, then divide that result by the original. In the example shown, the formula in E5, copied down, is:

=(D5-C5)/C5

The results in column E are decimal values with the percentage number format applied. The same formula can be used to calculate things like variance between this year and last year, variance between a budget and actual values, and so on.

In this example, the goal is to calculate the variance between a Forecast (column C) and Actual (column D) as a percentage. For example, with a Forecast value of 100,000 and an Actual value of 112,000, we want to return a variance of 12%.

The concept of variance requires a baseline value and a "new" value. The baseline value is subtracted from the new value and the result is divided by the baseline value. The general formula, where "x" is the variance, is:

x=(new-baseline)/baseline x=(112,000-100,000)/100,000 x=12,000/100,000 x=0.12

After converting to an Excel formula with cell references, the formula in E5, copied down, is:

=(D5-C5)/C5 =(112,000-100,000)/100,000 =12,000/100,000 =0.12 =12%

As the formula is copied down, it returns a decimal number for each item in the list. When these numbers are formatted with the Percentage number format, they are displayed as percentages.

### Formatting percentages in Excel

In mathematics, a percentage is a number expressed as a fraction of 100. For example, 25% is read as "Twenty-five percent" and is equivalent to 25/100 or 0.25. Accordingly, the values in column E are *decimal values*, with the Percentage number format applied. To convert these values to a whole number like 12, multiply by 100:

=(D5-C5)/C5*100

### Negative numbers

If you have a negative value for the original number, the above formula won't work and can be adjusted by adding the ABS function:

=(new-original)/ABS(original)

ABS stands for "absolute value", and it converts negative values to positive values. In this case, the ABS function ensures the original value is positive when the variance is calculated.

*Note: be aware that results negative values can be misleading, as explained by Jon Acampora in his detailed article on the topic.*

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