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20 Excel Functions Useful For Finance Professionals

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Microsoft Excel is a spreadsheet application released in 1985 by the Microsoft Corporation and has since grown to become one of the foremost computer programs in workplaces around the world. In business, literally, any function in any industry can benefit from those with strong Excel knowledge. Excel is a powerful tool that has become entrenched in business processes worldwide.

Why Excel Functions are useful for Finance Professionals?

An enormous amount of financial data is analyzed world over by finance experts, every day. These data help stakeholders and potential investors to improve investment portfolios and dig deeper into the finance market and help the economy grow. Excel is an indispensable part of the financial data analysis. Excel has as its backbone many hundreds of formulas and functions, to support calculations in a variety of fields. Some are applied more frequently than others at work and knowing them will prove worthwhile.

Below are 20 useful functions for finance professionals that are very essential in their day to day work.

DATA AGGREGATION

Data aggregation is any process in which information is gathered and expressed in a summary form. It is the compiling of information from databases with the intent to prepare combined datasets for data processing. They form the fundamental field calculation options of the Pivot Table in Excel.

SUM Function

The SUM function adds all the numbers in the range of cells and returns the result of the addition. The SUM function will return the sum of the values which are entered as multiple arguments. A total of 255 individual arguments can be handled by the SUM Function, which can include cell references, constants, ranges, arrays, and constants. It is an inbuilt function in Excel categorized as a Math/Trig Function.  

AVERAGE Function

The AVERAGE function calculates the average (arithmetic mean) of numbers provided as arguments. To calculate the average, Excel adds the numbers together and divides by the total number of values supplied.  AVERAGE can handle up to 255 individual arguments, which can include numbers, cell references, ranges, arrays, and constants. The AVERAGE function is an inbuilt function in Excel and is categorized as a Statistical Function.

AGGREGATE Function

Returns an aggregate in a list or database. The AGGREGATE function returns an aggregate calculation like AVERAGE, COUNT, MAX, etc., optionally ignoring hidden rows and errors. A total of 19 operations are available, specified by function number within the first argument.

It was created by Microsoft to deal with the restrictions of conditional formatting. Some conditional formatting cannot be applied if there are errors within the range. The Excel AGGREGATE function allows you to ignore errors or hidden rows. The AGGREGATE function is an inbuilt function in Excel and is categorized as a Math/Trig Function.

COUNT Function

The COUNT function returns the count of numeric values within the list of supplied arguments. Arguments can be individual items, cell references, or ranges up to a total of 255 arguments. All numbers including negative values, percentages, dates, fractions, and time are counted. Empty cells and text values are ignored. The COUNT function is an inbuilt function in Excel and is categorized as a Statistical Function.   

Note: The COUNTA function returns the count of cells that contain numbers, text, logical values, error values, and empty text (“”). COUNTA does not count empty cells.

MAX & MIN Function

MAX Function

The Excel MAX function returns the largest numeric value in a range of values. The MAX function ignores empty cells, the logical values TRUE and FALSE, and text values. The MAX function is an inbuilt function in Excel and is categorized as a Statistical Function.

MIN Function

The Excel MIN function returns the smallest numeric value in a range of values. The MIN function ignores empty cells, the logical values TRUE and FALSE, and text values. The MIN function is an inbuilt function in Excel and is categorized as a Statistical Function.

CONDITIONAL DATA AGGREGATION

Conditional aggregation is slightly more sophisticated when compared to data aggregation functions in the sense it facilitates aggregation based on criteria(s). It is simply the use of aggregates under one or more conditions, thus, potentially altering your results of functions like SUM (), COUNT (), etcetera in a particular column while allowing you to analyze your recordset as a whole.

IF Function

The IF function is one of the most popular functions in Excel which allows you to make a logical comparison between a value and what you expect based on a condition. The IF function performs a logical test that returns a specified value when conditions are met (TRUE result), and another specified value when otherwise (FALSE result). For example, to “pass” scores above 40: =IF(A1>40,”Pass”,”Fail”). To test more than one condition, we can use nesting IF functions. Logical functions like AND and OR can be nested within IF function to test multiple conditions. The IF function is an inbuilt function in Excel and is categorized as a Logical Function.

AND & OR Function

AND Function

In Excel AND function does not have any narrow usefulness, but in combination with other Excel functions, AND can significantly extend the capabilities of your worksheet. One of the most common uses of the Excel AND function is found in the logical test argument of the IF function to test several conditions instead of just one. The AND function is an inbuilt function in Excel and is categorized as a Logical Function.

OR Function

Use the OR function, one of the logical functions, to determine if any conditions in a test are TRUE.

The OR function tests different conditions in the meantime. This logical function helps you in comparing two values or statements in Excel. OR in Excel, on the other hand, returns either TRUE or FALSE. OR function will return TRUE if at least any one of the arguments or conditions evaluates as TRUE. Similarly, it will also return FALSE, if all the arguments or conditions are FALSE. The OR in Excel can be utilized as the logical test inside the IF function for avoiding extra nested IFs and can be also be used in combination with the AND function. The OR function is an inbuilt function in Excel and is categorized as a Logical Function.

SUMIFS & COUNTIFS

SUMIFS Function

SUMIFS function returns the sum of cells that meet multiple conditions simultaneously. Criteria can be applied to dates, numbers, and text. The SUMIF function supports logical operators (>,<,<>,=).The SUMIFs function supports logical operators (>,<,<>,=) and wildcards (*,?) for partial matching.

The SUMIFs function is an inbuilt function in Excel and is categorized as a Math/Trig Function.

COUNTIFS Function

COUNTIFS function applies criteria to cells across multiple ranges and counts the number of times all criteria are met.

The Excel COUNTIFS function returns the count of cells that meet one or more criteria. COUNTIFS can be used with criteria based on dates, numbers, text, and other conditions. COUNTIFS supports logical operators (>,<,<>,=) and wildcards (*,?) for partial matching. The COUNTIFS function is an inbuilt function in Excel and is categorized as a Statistical Function.

Note: SUMIF and COUNTIF functions have become redundant with the introduction of SUMIFS and COUNTIFS.

LOOKUP AND REFERENCE FUNCTIONS

Lookup and reference is the method of pulling data into an array or row to consolidate and categorize it for data processing.

VLOOKUP Function

VLOOKUP is an Excel function to lookup and retrieves data from a specific column in a table. We can use VLOOKUP when we need to find things that are aggregated in a table or as a range by row. For example, look up the price of a medicine by the unique code, or find details of an employee based on their employee ID.

VLOOKUP executes approximate and exact matching, which includes wildcards (*?) for partial matches. The “V” stands for “vertical”. Lookup values must appear in the first column of the table or range selected, with lookup columns to the right. The VLOOKUP function performs a vertical lookup by searching for a value in the first column of a table and returning the value in the same row in the index number position.

The VLOOKUP function is an inbuilt function in Excel and is categorized as a Lookup/Reference Function.

Note: HLOOKUP is a transpose replica of the VLOOKUP function to look up and retrieve data from a specific row in table. Use HLOOKUP when your comparison values are located in a row across the top of a table of data, and you want to look down a specified number of rows. The “H” stands for “horizontal”.

MATCH Function

The MATCH function returns the relative position of a value searched in an array.

MATCH is used to pinpoint the position of a lookup value in a row, column, or table. MATCH executes approximate and exact matching, which includes wildcards (* ?) for partial matches. Often, the MATCH function is nested within the INDEX function to retrieve the value at the position returned by MATCH. In financial analysis, we can use the MATCH function along with other functions to look up and return the sum of values in a column. The MATCH function is an inbuilt function in Excel and is categorized as a Lookup/Reference Function

TEXT MANIPULATION FUNCTIONS

Excel predominantly deals with numerical data, but at times you can come across a dataset which contains text and other string characters and that is when the Text Functions in Excel will help you to simplify the things easily. Text manipulation functions are helpful in formatting and data validation. It helps in providing context and uniformity to the dataset and thereby facilitate automation processing.

RIGHT LEFT MID Function

RIGHT Function

RIGHT function is a function which is used to give the number of characters from the end from the string which is from right to left, RIGHT function in Excel is used to return the last character or characters in a supplied text string, based on the number of characters specified. The RIGHT function is an inbuilt function in Excel and is categorized as a String/Text Function.

LEFT Function

LEFT function is a function which is used to give the number of characters from the start from the string which is from left to right, The LEFT function in Excel is a function which allows you to extract a substring from a string and starts from the leftmost character.

The LEFT function is an inbuilt function in Excel which has been categorized as a String/Text Function. The LEFT function in Excel can either be used as a worksheet function (WS) or a VBA function (VBA) in Microsoft Excel. It can be used as a worksheet function (WS) and a VBA function (VBA) in Excel and can be entered as part of a formula in a cell of a worksheet. You can use this in a macro code while compiling in a Visual Basic Editor.

MID Function

The MID function extracts a given number of characters from the middle of a supplied text string.

The MID function in Excel extracts a substring from a string (starting at any position). The MID function is an inbuilt function in Excel and is categorized as a String/Text Function. It can be used as a worksheet function (WS) and a VBA function (VBA) in Excel and the MID function can be entered as part of a formula in a cell of a worksheet. You can use this in a macro code while compiling in a Visual Basic Editor.

TRIM Function

The TRIM function removes all spaces from text except for single spaces between words. Use TRIM on text that you have received from another application that may have irregular spacing. It returns a text value with the leading, trailing and unnecessary spaces between words in a string removed.

The TRIM function is an inbuilt function in Excel and is categorized as a String/Text Function. It can be used as a worksheet function (WS) and a VBA function (VBA) in Excel and the TRIM function can be entered as part of a formula in a cell of a worksheet. You can use this in a macro code while compiling in a Visual Basic Editor.

LOWER & UPPER Function

LOWER function converts all uppercase letters in a text string to lowercase and the UPPER function converts all lowercase letters in a text string to Uppercase.

The LOWER and UPPER functions in Excel converts all letters in the specified string, only. If there are characters in the string that are not letters, they are unaffected by these functions.

 The LOWER and UPPER functions are inbuilt functions in Excel and is categorized as String/Text Function. They can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

CONCATENATE Function

CONCATENATE or join text is an Excel function is used to join two or more strings into one string.

The CONCATENATE function joins (concatenates) up to 30 text items together and returns the result as text. The CONCAT function replaces CONCATENATE in newer versions of Excel.

The CONCATENATE function is an inbuilt function in Excel and is categorized as a String/Text Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

TEXTJOIN Function

The TEXTJOIN function combines the text from multiple ranges and/or strings, and includes a delimiter you specify between each text value that will be combined. If the delimiter is an empty text string, this function will effectively concatenate the ranges.

The TEXTJOIN function concatenates (joins) values with a given delimiter. TEXTJOIN allows you to supply a range of cells, and has a setting to ignore empty values , unlike the CONCAT function. The TEXTJOIN function is an inbuilt function in Excel and is categorized as a String/Text Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

TIME FUNCTION

The Time functions are useful for assembling dates that need to change dynamically based on other values in a worksheet. Since most data sets in accounting make sense for financial periods, date functions are of huge relevance in the cut-off period and current period calculations.

EOMONTH Function

The EOMONTH function in Excel returns the last day of the month, n months in the past or future. You can use EOMONTH to calculate expiration dates, due dates, and other dates that need to land on the last day of a month. A positive value for months returns a date in the future, and a negative value to returns a date in the past.

The EOMONTH function is an inbuilt function in Excel and is categorized as a Date/Time Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

EDATE Function

The EDATE function returns date on the same day of the month, n months in the past or future. You can use EDATE to calculate expiration dates, maturity dates, and other due dates. A positive value for months returns a date in the future, and a negative value to returns a date in the past.

The EDATE function is an inbuilt function in Excel and is categorized as a Date/Time Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

ERROR HANDLING

Error handling refers to the response and recovery procedures from errors which may arise during the course of our work using Microsoft Excel. In other words, it is the process which comprises of anticipation, detection and resolution of errors. It helps make the spreadsheet look more presentable by returning a response to the errors that may arise, proactively.

IFERROR Function

The IFERROR function traps and handles errors in a formula. IFERROR returns a particular value you specify if a formula happens to evaluate to an error; otherwise, it returns the result of the formula.

The IFERROR function returns a custom result when a formula generates an error, and a standard result when no error is detected. It will check for errors such as #N/A, #VALUE!, #REF!, #DIV/0!, #NUM!, #NAME? or #NULL. The IFERROR function is an inbuilt function in Excel and is categorized as a Logical Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

If  you want to check for a specific error, there are specific error handling functions such as ERROR.TYPE, ISERROR, ISERR, ISERROR, ISLOGICAL, ISNA, ISNONTEXT, ISNUMBER, ISREF, etc.

FORMATTING

Formatting refers to the appearance or presentation of your essay. Another word for formatting is the layout. It helps in a presentation that increases the understandability of the reports generated from the user’s perspective.

ROUNDUP Function

ROUNDUP function in Excel returns a number rounded up to a given number of decimal places. Unlike standard rounding, where numbers less than 5 are rounded down, ROUNDUP rounds all numbers up

The ROUNDUP function is an inbuilt function in Excel and is categorized as a Math/Trig Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

TEXT Function

The TEXT function lets you alter the way a number appears by applying formatting to it with format codes. It’s useful in situations where you want to display numbers in a more readable format, combine numbers with text or symbols and to embed formatted numbers inside text. The TEXT function returns a value converted to text in a specified format.

The TEXT function is an inbuilt function in Excel and is categorized as a String/Text Function. It can be used as a worksheet function (WS) in Excel and can be entered as part of a formula in a cell of a worksheet.

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