Someone asked me off board why I present results as 97% or 101% instead of up 1% or down 3% ? I thought that that’s a good question, and that I should share my response with the board. Here are my thoughts:
I just figure I start at 100% and then figure where I am from there. That’s the way I’ve always done it.
I think it’s easier to visualize. For example, if you say A is up 1% on the year, and B is up 2%, it sounds as if B has done doubly as well and is beating the pants off A, but if you say A has grown to 101% since the beginning of the year, and B has grown to 102%, it’s gives you a much truer picture. Just how I think of it.
For example, lets they both started out with a hundred thousand dollars, and at the end of the year A has a hundred and one thousand, and B has a hundred and two thousand. Presenting the results as +1.0% and +2.0% gives the visual image that B did twice as well as A, that he did 100% better. But he didn’t do 100% better! He just did 1% better, and if you present the results as 101% and 102% you see that the difference between them is just noise in the system.
I hope that this has proved interesting.
For Knowledgebase for this board,
please go to Post #17774, 17775 and 17776.
We had to post it in three parts this time.
A link to the Knowledgebase is also at the top of the Announcements column
on the right side of every page on this board