What is Percentage Variation?
Percentage variation measures the extent of difference between a value and its benchmark, expressed as a percentage. It quantifies how much something has deviated from an expected or reference value.
How to Calculate Percentage Variation
The formula is:
[\text{Percentage Variation} = \frac{|\text{Absolute Difference}|}{|\text{Benchmark Value}|} \times 100]
Calculation Example
If your budget was $10,000 but actual spending was $11,500:
[\text{Absolute difference} = |11{,}500 - 10{,}000| = 1{,}500]
[\text{Percentage Variation} = \frac{1{,}500}{10{,}000} \times 100 = 15]
The spending varied by 15% from budget.
Applications
Budget Analysis
Compare actual expenses to budgeted amounts to identify variances.
Quality Control
Measure how much products deviate from specifications.
Performance Metrics
Assess how actual results compare to targets or goals.
Financial Analysis
Evaluate forecast accuracy and track deviations.
Interpretation Guidelines
| Variation | Interpretation |
|---|---|
| 0-5% | Minimal variation |
| 5-10% | Moderate variation |
| 10-20% | Significant variation |
| Over 20% | Major variation requiring review |
Related Metrics
- Coefficient of Variation: Standard deviation divided by mean
- Percent Change: Includes direction (positive/negative)
- Variance: Statistical measure of spread in a dataset