Question

You are the manager of the Advertising division of the TLN group. By what percent would you need to increase your division’s Year 2 revenue to reach $3 million in Year 3?

Answer 1

You need the revenue of year 2 to calculate what percent you have to increase it to reach 3 million in year 3.

Let R2 be the revenue of year 2 and R3 the revenue of year 3.

The formula of percent increase is:

% increase = ( R3 - R2 ) / R2 *100

=> % increase = (R3 / R2 - 1) * 100

So, given R3 is 3 million

=> % increase = (3,000,000 / R2 - 1) * 100

So, you just have to replace R2 to get the solution.

Let's do one example:

R2 = 2 million

=> % increase = (3,000,000 / 2,000,000 - 1) * 100 = (0.5) * 100 = 50

So, if the revenue of year 2 was 2 million, he needs to increase it 50% to reach 3 million.