Percent Increase in Production Volume is calculated by subtracting the most recent production volume by the previous production volume and dividing the outcome by the previous production volume.
Numerically this is calculated as (Current Production Volume - Previous Production Volume) / (Previous Production Volume). This calculation follows a standard "percent change" formula to equal to percentage increase (or decrease) in production volume.
This metric is used in the Auto Manufactueres Industry to judge the rate at which a company is growing in terms of its auto sales. This allows for comparison across companies of differing size since it is in percentage terms. This means that a 5% increase in production volume from company XYZ is better, all else equal, than a 2.5% increase in production volume from company ABC. However, this metric is not necessarily restricted to the automotive industry and can be applied to any industry where production volumes is a quantifiable and comparable value within the industry or between companies.
Example
- If company XYZ produced 150 units in 2008 and 200 units in 2009, its percent increase in production volume would equal 33%. This is calculated by (200 - 150) / (150) which is 50 / 150 which equals 1 / 3 or approximately 33%
- If company ABC produced 500 widgets in 2009 and 1000 widgets in 2008, its percent increase in production volume would be -50%. This is calculated by (500 - 1000) / 1000 which is -500 / 1000 which equals - 1 / 2 or -50%.
