The authors state the following formula for percent variance: =(C4-B4)/ABS(B4) where:

B4 =Budget = -10,000

C4 = Actual = 12,000

The formula returns 220% which the authors claim to be the correct percent variance.

This topic may have been discussed to death elsewhere, but I can’t resist the temptation to question the proposed formula. I know it is risky business to challenge such authorities as the authors of this book and even Microsoft, cf. http://support.microsoft.com/kb/214078. None the less I will hold that absolute changes are meaningful whereas percentage change are not particularly meaningful when you go from a negative value to a positive or the other way round.

The above formula gives for example the following results:

B4 = -10

C4 = 10

Result = 200%

B4 = -1

C4 = 10

Result = 1100%

How can an increase from a smaller number (-10) to 10 be a lesser percentage than an increase from a larger number (-1) to 10?

I’m not a mathematician, but I don’t think percent change with values of opposite signs is defined.

See also:

http://online.wsj.com/public/resources/documents/doe-help.htm

(the section named Net Income)

You might want to try the following in an empty sheet:

In B1 enter -100, and in C1 enter -99

Select B1:C1 and drag to GT1

In A2 enter -100 and in A3 enter -99

Select A2:A3 and drag to A202

In B2:GT202 enter the formula: = =B$1/$A2-1

Make an XY-chart of A1:GT202

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I parse them out of the formula by recognising the structured table references. A pain, but it works.

]]>…So how do you parse their names out of formulae?

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