-2
$\begingroup$

A company report its net profit 1,000,000 in 2000,and earned 1,100,000 in 2001,so the earning increase rate from 2000 to 2001 is as below:

1,100,000-1,000,000)/1,000,000 = 0.1 =10% 

A company report its net loss 1,000,000 in 2000,and earned 1,100,000 in 2001,so what is the the earning increase rate from 2000 to 2001 ?

(1,100,000-(-1,000,000))/(-1,000,000) = -2.1 = -210% 

Should i say that the earning increase rate from 2000 to 2001 is -210%?

Let suppose a extrem case:

A company report a zero profit in 2000,and earned 1,100,000 in 2001,what is the the earning increase rate from 2000 to 2001 ?

(1,100,000 - 0)/ 0 # no meaning!
$\endgroup$
1
  • 5
    $\begingroup$ I think this is more of a business-specific convention question than a math question (but maybe this Wikipedia article will help) and it also seems a bit outside the scope of elementary school (at least in the U.S., being roughly at most age 11) where students probably know little about the context. Moreover, I would advise when presenting this that you either avoid the non-parallel usage of terms (e.g. "profit" and "amount earned"; some might think "amount earned" is revenue) or make sure the context is fully explained. $\endgroup$ Aug 10 at 10:02
2
$\begingroup$

A company will use NM indicating, as you noted, "No Meaning". This is less of a right/wrong problem as it is a problem that opens up a discussion. The actual meaning of these +/- percents and what then mean for the company.

I'll draw a comparison. Without explicit instructions, students often have no idea how many digits to round to in their final answer. When a population problem results in a decimal, I ask them to use common math sense. The answer is an integer, of course, but if the problem continued, use the decimal, lest a series of rounding errors accumulates through the calculations.

$\endgroup$

Not the answer you're looking for? Browse other questions tagged or ask your own question.