Question about modifying a pattern

[sunflower.mama]

Hi all,
I am trying my hand at knitting after a long hiatus. I picked up a pattern to knit a hat...which states that the finished circumference will be 20 1/2 in. Great...except I just measured my head and it's 25 inches! Since my initial instruction is to cast on 56 stiches, and work 26 rows, can I assume that to modify for myself I would do the following...
56/20.5=2.73
25*2.73=68.25
So I would thus cast on 68 instead of 56?
The rest of the directions are just a gradual decline in stiches, which I think I could wing fairly simply, assuming the above is correct.
Thanks!

[Knittin' in the Shade]

generally with hats you want a nice bit of negative ease, so that it will stretch to fit and not fall down into your eyes. So, I'd probably shoot for 22-23" actual circumference, which should fit your 25" head nicely

[sunflower.mama]

Thank you! That's so helpful!
Now in knitting my gauge, which is a K2 P2 rib, do I stretch out the little square to measure, or do I measure it as it lies, somewhat wrinkled if you will, in the rib? (It's a very thick yarn so it has a lot of stretch to it.

[Knittin' in the Shade]

you definitely want to stretch it a bit, but not fully stretched. (I know, so helpful, LOL!)