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Mastering

Excel® Functions

& Formulas

© SkillPatha division of the Graceland College Center for Professional Development and Lifelong Learning, Inc.All rights reserved, including the right to reproduce this material or any part thereof in any manner.

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MASTERING EXCEL® FUNCTIONS & FORMULAS

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Course Overview

There are more functions in Excel® than you can imagine. There are more than enough to fill an hour of your time.

Therefore, it’s essential to concentrate on the ones with the biggest ROI—examples of Financial, Text, Conditional and Analytical Functions.

In this course, we’ll examine a few of the functions that illustrate the major function categories—Financial, Statistical, Logical, Lookup, Array, Date, Math and Text.

While these functions provide unique calculations, they all have similar constructions:

Function Name(Required Arguments, [Optional Arguments])

You’ll find all of Excel’s functions by exploring the categories in the Function Library group on Excel’s Formula tab.

While we can’t cover all of Excel’s functions in one session, we’ll explore the most important ones.

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PARTICIPANT NOTEBOOK

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Financial Functions: PMT, FV, RATEFinancial functions enable you to calculate monthly loan payments, estimate the future value of current investments and the determine the effective interest rate of a loan.

These are not basic functions, like AVERAGE or SUM, but they use the same argument-based syntax. They simply require a deeper understanding of their unique arguments.

PMT—returns the amount of the monthly payment for a loan. The PMT function answers the question, “If this is the amount of the loan and this is the annual interest rate, how much do I owe each month?”

FV—returns the future value of an amount saved today. It answers the question, “If I put away X amount of money a month for Y number of months at Z interest rate, how much will I have in the bank?”

Financial and Statistical Functions

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RATE—returns the effective interest rate of a loan. Rate answers the question, “If you give me $8000 and I agree to pay you $200 per month for four years (to pay you back), what’s the effective interest rate?”

Statistical Functions: AVERAGE, MIN, MAX, MODE, MEDIAN, COUNTThere is a family of statistical functions that perform calculations on a “population” of values.

SkillTip: “Population” is the term used to refer to the numbers you are analyzing.

Statistical Functions include:

AVERAGE—returns the SUM of the values divided by the number of values. Sometimes it’s called the “arithmetic mean”. Text, logical values (True/False) and empty cells are ignored.

MIN—returns the lowest value in a population.

MAX—returns the highest value in a population.

MODE—returns the most frequently occurring, or repetitive value in a population. Text, logical values (True/False) and empty cells are ignored. MODE.SNGL returns a single value.

MEDIAN—returns the middle of a set of numbers. Half of all the values are above it.

COUNT—counts the number of cells in a range that contains numbers.

SkillTip: You can apply a function to a range of cells or a range name. Range Names are aliases for a range of cells. For example, the word, “Population”, can refer to cells B2:B26.

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Other Statistical Functions: STDEV, VAROther statistical functions return analytical information about an entire population of values to determine how far the results range from the MEAN and how spread out the results are.

Excel’s functions that calculate this are:

STDEV—returns the standard deviation of a population, which is a measure of how widely values are dispersed from the population’s average value. A normal distribution of values has 99.999% of the results within 3 standard deviations (also known as Sigma or σ) from the mean.

VAR—returns the variance, the average of the squared differences from the population’s mean (average). It indicates how varied the results are from the average.

Let’s say you have a population of numbers with the following properties:

• Mean: 0.018

• Variance: 26.341

• Standard deviation: 5.132

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You would say that it’s a “normal” distribution in that the variance is within 3 standard deviations of the mean.

SkillTip: Note how the distribution of the values in the histogram are within ± 3 standard deviations of the mean. This is called a “normal” distribution of values.

Additional Statistical Functions: RANK, PERCENTILE, QUARTILE, LARGEWhen you are analyzing a population of numbers it can also be important to know where each value ranks in comparison to the other numbers.

To calculate relative rankings, use:

RANK—returns the rank of a number. Rank is its size relative to other values in a list. If you sorted the list, this would be the position of the number in the list.

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PERCENTILE—returns either true or false if a value is within a certain percentile when compared to the entire population.

QUARTILE—returns either true or false if a value is within a certain quartile when compared to the entire population.

LARGE—returns the nth largest value in a range.

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The IF FunctionYou use the IF function to drive a calculation based upon whether a condition is true or false. For example, you’ll pay a 10% commission IF the profit is more than 35% of sales.

The IF Function

=IF(Logical_Test,[value_if_true],[value_if_false])

SkillTip: Conditional operators include: Not Equals < >. Equals =, Greater than or Equals >=, Less Than or Equals <=, Less Than <, or Greater Than >

Example: A bonus will be paid if “Profit” exceeds 35% of the sale.

=IF(D7>B7*0.35, B7*0.1, ”No Bonus”)

SkillTip: Rather than put “.35” in a formula, put the value in a cell and refer to the cell in your formula.

Logical Functions

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The Nested IF FunctionYou can daisy chain (nest) IF statements when you need tiered conditions.

Example: A higher commission is paid IF you exceed 35%... but a lower commission is paid if you exceed 25%.

=IF(Logical_Test,[value_if_true], IF(Logical_Test,[value_if_true],[value_if_false]))

Example: If the profit is greater than 35%, you earn 10% of the sale. However, if the profit is greater than 25% of the sale, you earn 5% of the sale. Otherwise, you earn 0 commission.

=IF(D7>B7*0.35,B7*0.1,IF(D7>B7*0.25,B7*0.05,0))

IF with ANDYou can also require multiple conditions to be true to drive the calculation by using the AND operator.

Example: You only pay 5% commission IF Region = “Central” AND Profit is greater than 25% of Sales.

=IF(AND(D7>B7*0.25,C7=”Central”),B7*0.05,0)

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IF with ORYou can use an “either or” condition in your formula with the OR operator.

Example: You pay a 5% commission IF Region = “Central” OR Profit is greater than 50% of sales.

=IF(OR(D7>B7*0.5, C7=” Central”), B7*0.05,0)

CHOOSEThe CHOOSE function allows you to selectively calculate a formula based on a number rather than daisy-chaining 5 IF statements.

Example: If RANK = “1” then Award = “Platinum”, If RANK = “2” then Award = “Gold”, If RANK = “3” then Award = “Silver”, If RANK = “4” then Award = “Bronze”.

That’s a lot of IF statements!

You can use CHOOSE instead.

CHOOSE(index, value1, value2, value3…)

Example: To determine whether the award is Platinum, Gold, Silver or Bronze:

=CHOOSE(C2, $G$5, $G$4, $G$2, $G$3)

SkillTip: You might study the CHOOSE function and notice it reminds you of VLOOKUP. Many functions overlap one another and are somewhat interchangeable. CHOOSE is easy because the numbers in the example prevent the need for the more complicated VLOOKUP Function.

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COUNTIF, SUMIF and SUMIFSAlthough COUNTIF, SUMIF and SUMIFS are categorized by Excel as Mathematical functions, you can think of them as related to logical functions because they use “IF” conditions.

If you want to add only some numbers … or count some numbers … use the SUMIF and COUNTIF FUNCTIONS.

SkillTip: With SUMIF and COUNTIF, you’ll also find their plural versions, SUMIFS and COUNTIFS. Additionally, you’ll find their “cousins,” AVERAGEIF, AVERAGEIFS, MAXIFS and MINIFS. They all behave in similar ways. The only difference is the calculation performed.

COUNTIF—returns the number of times a value appears in a list.

=COUNTIF(Range,Criteria)

Example: How many times does a person’s name appear in a list of names?

=COUNTIF($A$4;$A$12, “Jonathan Davis”)

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SUMIF—returns the total of a value column that corresponds to another column that matches a single condition.

=SUMIF(Range,Criteria,[SumRange])

Example: How much is the sum of Commissions for Jonathan Davis?

SUMIF ($A$4:$A$12, “Jonathan Davis”,$B$4:$B$12)

SUMIFS—returns the total of a value column that corresponds to other columns that match multiple conditions.

= SUMIFS(Sum_Range, Criteria_Range1, Criteria1, [Criteria_Range2, Criteria2], ...)

Example: How much is the sum of Commissions for Jonathan Davis that are GREATER THAN OR EQUAL TO $400?

SUMIFS($B$4:$B$12,$A$4:$A$12,”Jonathan Davis”, $B$4:$B$12, “>=400”)

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VLOOKUP, INDEX and MATCHVLOOKUP—returns a value that matches a single value.

Example: A Part Number corresponds to a specific price.

VLOOKUP allows the user to reference a “lookup” table that contains information that can be matched to their current list.

VLOOKUP (What You Are Matching, Where Is Your Reference Table, ColumnIndex, MatchType)

SkillTip: The ColumnIndex is the number of the column in the reference area that stores the value for your result. The MatchType is 0 or 1. 0 means an exact match is required.

VLOOKUPs are useful for price lookups, employee data lookups and student data lookups.With VLOOKUP, the reference data can be maintained in a centralized list, and if the values in the list change, the formulas that point to it update accordingly.

To calculate the Price from the Part Number/Price list:

=VLOOKUP(B6, PriceTable, 2, 0)

SkillTip: Reference tables should be absolute ranges so that when the lookup formula is copied to other cells, the formulas will continue to reference the correct reference range. One way to ensure the VLOOKUP table is absolute is to name the range that contains the reference list.

Lookup Functions

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VLOOKUP has a few limitations.

With VLOOKUP

1. The lookup column MUST be the first column of the Reference Table

2. The ColumnIndex in the lookup formula MUST be to the right of the matching column in the reference table

These limitations of VLOOKUP make it important to understand INDEX and MATCH—which together are more flexible than VLOOKUP.

INDEX—identifies a value in a certain column or row.

=INDEX(array,row_number,column_Number)

Example: Return the content of the cell at the intersection of the sixth row and third column of the range $D$3:$M$9.

=INDEX($D$3:$M$9,6,3)

MATCH—returns the row or column index number that contains a value that matches a condition.

Instead of VLOOKUP, you can use the MATCH function to find a specific location in a reference table and return a column or row number.

Together these two functions can be used instead of VLOOKUP.

=INDEX(array,MATCH(lookup_value,lookup_array,[match_type])

Example: If you want to find the price of an item, based on the Part Number (from the VLOOKUP example).

=INDEX (“The List of Prices”, MATCH(Part Number, Part Number List, 0)

SkillTip: When you are only looking for a row number, you can omit the second MATCH command from within the INDEX function.

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The MATCH Command uses a 0 to require an exact match. Here are your other choices:

Match Type Code Result

0Returns the position in a range of the first value that exactly matches the lookup value in the lookup table can be in any order.

1Returns the position of the largest value in a range that is <= the lookup value. Values in the lookup range must be in ascending order.

-1Returns the position of the smallest value in a range that is >= the lookup value. Values in the lookup range must be in descending order.

You can use the INDEX command to locate data at the intersection of both a row and column.

=INDEX(array,MATCH(lookup_value,lookup_array,[match_type]),MATCH(lookup_value,lookup_array,[match_type]))

For example: if you were looking for the exam results for a specific student (vertical lookup) and for a specific week (horizontal lookup) you could Index that row and column location.

=INDEX ($A$5:$K$14, MATCH (“JR698315”, $A$5:$A$14,0), MATCH(“Week3”, $A$5:$K$5,0))

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Simple Array FormulasArray formulas are a special class of formulas you can use to either analyze a range of cells or return a range of cells.

If you had a list of quantities and prices and wanted a grand total, you could write separate formulas for each line item and then total the results.

However, with an array approach, you could use one formula, SUMPRODUCT, to both multiply quantity and price and total the results. SUMPRODUCT applies a combination of multiplication and addition to ranges of cells (arrays).

SUMPRODUCT(array1, [array2], [array3], ...)

Example: You need the grand total of all sales from all customers.

SUMPRODUCT($B$3:$B$13, $C$3:$C$13)

Array Formulas and Functions

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Complex ApplicationsWhile SUMPRODUCT is a simple array formula, others are more complex and require you to press CTRL + SHIFT + ENTER when completed.

SkillTip: You can recognize these special types of formulas because they are surrounded by French braces { }. You never type them, they are inserted when you complete your formula and press CTRL + SHIFT + ENTER. Sometimes these types of Array formulas are called CSE formulas for the need to press CTRL + SHIFT + ENTER.

The FREQUENCY function is a CSE function. FREQUENCY—returns a count based on a table of break points (bins).

The FREQUENCY function calculates how often values occur within a population, and then returns a vertical array of numbers. Because it returns an array, it must be entered as an array (CSE) function.

Example: When you need to know how many occurrences of a value appear in a list, use the frequency function.

FREQUENCY(data_array, bins_array)

SkillSteps: To complete an array formula:

1. Highlight the destination cells: M3:M11

2. Type =FREQUENCY(J3:J44, L3:L11)

3. Press CTRL + SHIFT + ENTER

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Condense Long IF FunctionsInstead of writing a complicated IF function to calculate the number of occurrences of a value in a range, you can use another type of array function that counts the number of unique entries in an array.

Example: To count the number of unique entries in a list,

=SUM(1/COUNTIF($R$2:$R$R$17, $R$2:$R$R$17))

SkillTip: Remember to press CTRL + SHIFT+ ENTER.

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Evaluate Array FormulasLearning array functions can be challenging! Use Excel’s Evaluate Formula tool to discover how this array formula works.

SkillSteps: To use the Evaluate Formula tool:

Formulas > Formula Auditing > Evaluate Formula > Evaluate

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Numbers and words are not the only components of functions. With Excel, you can use functions that calculate days of the week, durations of tasks and projected end dates.

For those types of calculations, you can use WEEKDAY, NETWORKDAYS and WORKDAY.

WEEKDAYWEEKDAY—returns the number of the day of the week of a cell that contains a date. For example, Sunday = 1.

WEEKDAY(serial_number,[return_type]

Return Type Value Calculation

0 or blank Sunday = 1, Saturday = 7

2 Monday = 1, Sunday = 7

3 Monday = 0, Sunday = 6

Date Functions

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NETWORKDAYSNETWORKDAYS—returns the number of workdays between a starting and ending date. It excludes Saturdays, Sundays and holidays.

SkillTip: You’ll need to identify which dates are holidays.

NETWORKDAYS(start_date, end_date, [holidays])

Example: You plan a six-month project and need to know the total number of working days you have between the planned start date and planned end date.

=NETWORKDAYS(L1, L2, $H$2:$H$14)

HINT: While the total number of days might be 184, the number of working days is fewer—129.

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WORKDAYWORKDAY—returns the workday that is a certain number of workdays (not weekends and not holidays) after the start date.

WORKDAY(start_date, days, [holidays])

Example: Your project is slated to start on 3/1/15 and run for 55 working days. When will it be calculated to end?

WORKDAY(L7, L8-1, $H$2:$H$14)

Hint: It’s not 4/24/15. You must take weekends and holidays into consideration—so it’s 5/15/15.

SkillTip: Again, you’ll need to identify which dates are holidays.

SkillTip: If you want to count your start date as a day of work, then subtract one from the planned number of workdays. Otherwise, the calculation will start work on the day “after” the start date.

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When you are working with numbers—whether scientific or accounting-related, it’s important to control precision and the number of decimal places.

For those situations you can use ROUND, ROUNDUP, ROUNDDOWN, MROUND, CEILING and FLOOR.

ROUNDThe ROUND function enables you to round numbers to a certain number of decimal places. The ROUND function rounds results to the nearest power of 10—often to two or to zero decimals.

SkillTip: The ROUND function modifies the value. It is not the same as merely formatting the cell for two decimal places.

ROUND(number, num_digits)

Example: You need to ROUND a value to 0 decimal places.

ROUND(A2,0)

Example: You need to ROUND a value to 2 decimal places.

ROUND(A2,2)

Math Functions

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ROUNDUPROUNDUP always rounds UP to the next level.

ROUNDUP(number, num_digits)

Example: When you always want to round up

ROUNDUP(C3*D4,1)—If C3*D4 equals 7.32, changes result to 7.4.

Whereas, ROUND(C3*D4,1), if C3*D4 equals 7.32, changes result to 7.3.

ROUNDDOWNROUNDDOWN always rounds DOWN to the next level.

ROUNDDOWN(number, num_digits)

Example: When you always want to round down

ROUNDDOWN (C3*D4,1)—If C3*D4 equals 7.84, changes result to 7.8.

Whereas, ROUND(C3*D4,1), if C3*D4 equals 7.84, changes result to 7.9.

MROUND, CEILING, FLOORMROUND, CEILING and FLOOR: Allow rounding to any value, not just powers of 10. They are more customizable than their counterparts, ROUND, ROUNDUP and ROUNDDOWN.

MROUND—returns a number rounded to the nearest multiple.

MROUND(number, multiple)

Example: You want to round time to the nearest multiple of 15 minutes.

=MROUND(“8:10 AM”,”0:15”)

The result would be 8:15 AM.

=MROUND(“8:05 AM”,”0:15”)

The result would be 8:00 AM.

SkillTip: MROUND rounds up, away from zero, when the remainder of dividing the number by the multiple is greater than or equal to half the value of multiple.

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CEILING—returns number rounded up, away from zero, to the nearest multiple of significance.

CEILING(number, significance)

Example: You want to round numbers upward to the nearest nickel.

CEILING(4.42,0.05)

The result would be $4.45.

FLOOR—returns number rounded down, away from zero, to the nearest multiple of significance.

FLOOR(number, significance)

Example: You want to round numbers downward to the nearest nickel.

=FLOOR(4.42,0.05)

The result would be $4.40.

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Who hasn’t had to “clean up” data that has been poorly input by a colleague or a system?

Text functions like TRIM, PROPER, UPPER and LOWER help you standardize data without having to retype everything.

Text Functions: TRIM, PROPER, UPPER, LOWERTRIM—Removes all spaces except for one space between words.

TRIM(text)

Example: =TRIM(“ First Quarter Earnings “)

Result: First Quarter Earnings

PROPER—Capitalizes the first letter of each word.

PROPER(text)

Example: =PROPER(“first quarter earnings”)

Result: First Quarter Earnings

UPPER—capitalizes all letters.

UPPER(text)

Example: =UPPER(“First Quarter Earnings”)

Result: FIRST QUARTER EARNINGS

Text Functions

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LOWER—converts all capital letters to lower case.

LOWER(text)

Example: =LOWER(“First Quarter Earnings”)

Result: first quarter earnings

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All of Today’s Functions

FINANCIAL STATISTICAL LOGICAL LOOKUP DATE MATH TEXT

FV PERCENTILE IF VLOOKUP WEEKDAY ROUND TRIM

PMT QUARTILE AND INDEX WORKDAY ROUNDUP PROPER

RATE RANK OR MATCH NETWORKDAYS ROUNDDOWN UPPER

LARGE SUMIF MROUND LOWER

FREQUENCY SUMIFS CEILING

TRANSPOSE COUNTIF FLOOR

MODE COUNTIFS

MEDIAN

STDEV

VAR

AVERAGE

MAX

MIN

Appendix: Bonus Material

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Formula Shortcuts

Shortcut Effect

F2 Enables you to edit a formula

Ctrl + a Displays the arguments of a function

Tab Is the command completion character when you begin to type the name of a function

ALT + = The keyboard shortcut for AutoSum

F4 Converts cell addresses or ranges from Relative to Absolute and Mixed References

Shift + F3 To bring up Excel’s Insert Function Wizard (same as clicking fx)

F9 The Calculate button … when you highlight a section of a formula, it evaluates that portion of the formula

Ctrl + ` Toggle “show formulas” on and off

Ctrl + ‘ Copy the formula from the cell above

Ctrl + Shift + A Insert Function Arguments—after you’ve typed “(“

Ctrl + Shift + U Expand or compress the formula bar

Ctrl + Shift + F3 Create names from Selection

Ctrl + F3 Name Manager

F3 Paste a name into a formula

Ctrl + Shift + Enter Enter an Array Formula

Best Practices• Use cell addresses in formulas, not values

• Avoid formulas linked (daisy-chained) to other formulas

• Rather than writing a single complicated formula, use “helper” columns

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