Lawyers are wordsmiths not mathematicians who, when working on
a deal, often leave the complex math to the bankers and
accountants. Some of us decided to go to law school because of our
dread of math; finance and the sciences were out for us.
This leads to my topic today, what is the difference between a
Percent and a Percentage
Point and why do we care?
It only takes a brief look at their linguistic roots to make it
painfully obvious. My British colleagues write
"percent" as two words "per cent" which evokes
the Latin origins of
the word meaning "by the hundred". Percent tells us
how much out of 100 something is. It can tell us what fraction
something is out of a whole (e.g., saying gross margin are
80% means $80 are left out of every $100 of sales after deducting
cost of goods sold) or it can tell us how much something has
increased (e.g., revenue is up 10% this year means for every $100
of revenue last year we have made $110).
