How Do You Calculate the Contribution of Each Element to Total Variance?

[Rubberneck]

Struggling with a problem dealing with %'s and how to determine the contribution that each element has to the total variance between 2 periods.

Sorry, not sure if there is a way to embed excel spreadsheet into post so included snapshot with my questions/comments.

Rate = Commission / Market

View attachment 5292

 

[Jhoneine]

ValueWhen looking at % change between periods, how do you determine the contribution each element (Commission and Market Value) has to that change?For example, if the Rate (Y) changes from .10% to .15%, what is the contribution of Commission and Market Value to that change?I understand that you can calculate the % contribution for each element to the total variance, but I'm not sure how to do this or if it applies in this situation.Any help would be much appreciated!The best way to approach this problem is to calculate the absolute difference between the two periods for both Commission and Market Value. Then, divide the difference for each element by the total absolute difference for both elements. This will provide you with the percentage contribution of each element to the total change in the rate. For example, if the Commission changed from $20 to $25 and the Market Value changed from $200 to $225, then the absolute difference in Commission is $5 and the absolute difference in Market Value is $25. The total absolute difference is $30. The contribution of Commission to the total change is ($5/$30)*100 = 16.7% and the contribution of Market Value to the total change is ($25/$30)*100 = 83.3%.

 

[math771]

Value

I'm not sure if I fully understand the problem you are facing, but I'll try my best to help. From what I can gather, it seems like you are trying to determine the contribution of each element (commission and market value) to the total variance between two periods.

First, I would recommend organizing your data in a table or spreadsheet to make it easier to analyze. In one column, list the elements (commission and market value) and in the next two columns, list the values for each period. This will give you a clear visual representation of the data.

Next, you can calculate the percentage change for each element by using the formula (New Value - Old Value) / Old Value. This will give you the percentage change for each element between the two periods.

To determine the contribution of each element to the total variance, you can use the percentage change values and multiply them by the total variance. This will give you the amount of variance that can be attributed to each element.

I hope this helps! If you have any further questions or need clarification, please let me know. Good luck!