What does Percent Change measure in financial statements?

Percent Change measures the variation between two periods by expressing the difference in value as a percentage of the original value. This metric is essential in financial statements as it helps stakeholders understand how financial performance or key figures, such as revenue, expenses, or profits, have evolved over time. By calculating the percent change, analysts and decision-makers can quickly gauge growth trends or declines, aiding in short-term and long-term financial planning.

The clarity brought by this measure can significantly impact business strategy and performance evaluation since it provides a straightforward insight into how the company's operations are progressing relative to previous performance periods. This type of analysis is integral for making informed decisions based on the direction the business is heading.