Question

Assume the following sales data for a company:

2019	$946000
2018	891100
2017	670000

If 2017 is the base year, what is the percentage increase in sales from 2017 to 2018?

Answer 1

Inorder to find out the increase in percentage in sales, we need to find out the difference between the two figures of sales in 2017 and 2018. The resulting figure is then divided by the Base years sales revenue. Now, just multiply by 100 to get the increase in percentage.

In the above question,

Sales in 2018 = 891,100.

Sales in 2017 = 670,000.

Here, Base year is 2017.

Current year is 2018.

Percentage increase in sales from 2017 to 2018 is,

= [( 891,100 - 670,000)/670,000]*100.

= (221,100/670,000)*100

= 0.33 * 100

Percentage increase in sales = 33 %.

Hence, percentage increase in sales revenue from 2017 to 2018 is 33 %.

SUMMARY:

If we want to know the percentage increase in sales, then we should compare two figures to find out. Here, it is asked for increases in sales from 2017 to 2018. So the Base period is 2017 whereas 2018 is the current period. Equation is,

[(sales revenue in current period-sales revenue in Base period) /sales revenue in Base period] *100

So we got answer as 33%.

If we want to check our answer is correct or not, just apply this percentage on Base periods sales revenue.

Base period sales = 670,000

Percentage increase = 33%.

Percenatge value = 670,000*33%

Percentage value = 221,100.

So sales in 2018 will be sales in Base period plus percentage increase value.

Sales in 2018 = 670,000+221,100

Sales in 2018 = 891,100.

Hence, 33 % is the increase in sales from 2017 to 2018 period.