Definition

# What Is Net Change? Formula to Calculate Net Change with Practical Example

## What is Net Change?

The Net Change is the discrepancy between the current trading session's closing price and the previous trading session's closing price. It shows whether the market is upwards or downwards from the previous day which can be favorable or unfavorable.

## Understanding Net Change

Share prices, bond rates, unit trust prices, derived products, and other exchangeable instruments all utilize the term "net change." The daily price change refers to this particular change as well. The large positive increase in the value of assets is stated with a plus sign, +0.70, which can reflect 70 cents or any other valued unit. The lower net change is indicated with a negative sign, -0.70, once an asset has dropped in value.

It's also possible to indicate the variance as a percentage. In reality, a percentage figure is more informative and depicts the relative return and so the exact price rise does not represent. It facilitates the comparison of net variations between commodities.

Sometimes it's difficult to communicate just the needed changes to a program and that the only option is to provide all the information for a specific type of unit and at that time the net change operation improves in updating system performance. It verifies the data being supplied and discards any data that hasn't changed. This helps the regional integration by restricting the quantity of data that is applied to the dataset and providing quantity restrictions simpler to adhere to.

## Formula to Calculate Net Change

Net change = Current period’s closing price – Previous period’s closing price

Also, in percentage terms, the formula is:

Net change (%) = [(current period’s closing price – previous period’s closing price) / previous period’s closing price] * 100

Here,

Current period’s closing prices = closing price at the end of the period when the analysis is done.

Previous period’s closing price = price at the beginning of the period for which analysis is to be done.

## Practical Example

The stock values of the XYZ Corporation. The shares finished at \$60.99 just at end of the most recent session. At the end of the previous trading session, the shares of the same business finished at \$59.55.

Net change = \$60.99 - \$59.55

= \$1.44

## In sentences

• The stock price of ABC company fell sharply in the first week of the month, but there was no net change at the month-end.

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