What is the formula to calculate percentage change in linear trend analysis?

The formula to calculate percentage change in linear trend analysis is (Later Year - Previous Year) / Previous Year. This formula effectively measures the change in value from one period to another relative to the initial value, allowing for the calculation of how much something has increased or decreased as a percentage of the previous year's figure.

Using this approach, you take the difference between the later value and the previous value, which gives you the actual change. Dividing this difference by the previous year's value places this change in the context of the size of that earlier value, providing a percentage that is easily interpretable. This is critical for analyzing trends over time, as it helps assess growth or decline in a consistent manner.

The alternative options do not correctly define the calculation for percentage change. For example, one option suggests subtracting the later year from the previous year, which would yield a negative value for an increase and does not represent a change properly. Another option attempts to use the average of two values, which does not relate to percentage change. Lastly, calculating the difference between total revenue and total expenses does not pertain to the change in values over time, making it irrelevant in this context.