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Equity Formula (Table of Contents)

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What is Equity Formula?Equity = Total Assets – Total Liabilities

There is another method to derive the equity of a company. In this method, all the different classes of equity capital, which includes common/capital stock, share premium, preferred stock, retained earnings and accumulated other comprehensive income, are added while the treasury stocks are deducted. Mathematically, it is represented as,

Equity = Capital Stock + Share Premium + Preferred Stock + Retained Earnings + Accumulated Other Comprehensive Income – Treasury Stock

Examples of Equity Formula (With Excel Template)Let’s take an example to understand the calculation of Equity in a better manner.

You can download this Equity Formula Excel Template here – Equity Formula Excel Template

Equity Formula – Example #1Let us take the example of a company ABC Ltd that has recently published its annual report for the financial year ending on December 31, 2023. As per the balance sheet, the total assets of the company stood at $500,000, while its total liabilities stood at $300,000 as on December 31, 2023. Determine ABC Ltd’s equity as on the balance sheet date.

Solution:

Equity is calculated using the Formula given below.

Equity = Total Assets – Total Liabilities

Equity = $500,000 – $300,000

Equity = $200,000

Therefore, ABC Ltd’s equity stood at $200,000 as on December 31, 2023.

Equity Formula – Example #2Let us take the Real-Life example of Airbus SE’s published annual report as on December 31, 2023. As per the balance, the information is available. Calculate Airbus SE’s equity based on the given information.

Equity is calculated using the Formula given below.

Equity = Capital Stock + Share Premium + Retained Earnings + Accumulated Other Comprehensive Income – Treasury Stock

Equity = €777 + €2,941 + €5,923 + €134 – €51

Equity = €9,724 million

Therefore, Airbus SE’s equity stood at €9,724 million as of December 31, 2023.

ExplanationThe formula for equity can be derived by using the following steps:

Step 1: Firstly, determine the total assets of the company, which is the last line item on the asset side of the balance sheet and includes plant, machinery, cash, bank deposits, investments, etc.

Step 2: Next, determine the total liabilities of the company, which is also available in the balance sheet and includes all kinds of debt obligations, payables, etc.

Step 3: Finally, the formula for equity can be derived by subtracting the total liabilities (step 2) from the total assets (step 1) as shown below.

Under the other method, the formula for equity can be derived by using the following steps:

Step 1: Firstly, identify all the different categories of equity capital from the balance sheet.

Step 2: Finally, the formula for equity can be derived by adding up all the categories of equity capital except ones that have been repurchased and retired (also known as treasury stock) as shown below.

Equity = Capital stock + Share premium + Preferred stock + Retained earnings + Accumulated other comprehensive income – Treasury stock

Relevance and Uses of Equity FormulaFrom the perspective of an investor or an investment analyst, it is important to understand the concept of equity because it predominantly used to evaluate the real value of a company (net worth). In fact, the value of one’s equity investment in the company is captured by the equity value and as such the shareholders are typically concerned with the net worth of the company.

The value of equity can be both positive or negative. A positive equity value indicates that the company has adequate total assets to pay off its total liabilities. On the other hand, a negative value of equity indicates that the company may be on the way to become insolvent as the total liabilities exceed its total assets. Consequently, the investor community, in general, considers a company to be risky and perilous if it has a negative equity value. However, the value of equity in isolation may not give very meaningful insight into a company’s financial health. But an investor can use the equity value to analyze the company to draw significant conclusions if it is used in combination with other financial metrics.

Equity Formula CalculatorYou can use the following Equity Formula Calculator.

Total Assets Total Liabilities Equity Equity = Total Assets

–

Total Liabilities =

0

–

0

= 0

Recommended ArticlesThis is a guide to Equity Formula. Here we discuss how to calculate Equity along with practical examples. We also provide an Equity calculator with a downloadable excel template. You may also look at the following articles to learn more –

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## Calculator (Example With Excel Template)

Cost-Benefit Analysis Formula (Table of Contents)

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What is the Cost-Benefit Analysis Formula?The term “cost-benefit analysis” refers to the analytical technique that compares the benefits of a project with its associated costs. In other words, all the expected benefits out a project are placed on one side of the balance and the costs that have to be incurred are placed on the other side. The cost-benefit analysis can be executed either using “benefit-cost ratio” or “net present value”.

The formula for a benefit-cost ratio can be derived by dividing the aggregate of the present value of all the expected benefits by an aggregate of the present value of all the associated costs, which is represented as,

Benefit-Cost Ratio = ∑PV of all the Expected Benefits / ∑PV of all the Associated Costs

The formula for net present value can be derived by deducting the sum of the present value of all the associated costs from the sum of the present value of all the expected benefits, which is represented as,

Net Present Value = ∑PV of all the Expected Benefits – ∑PV of all the Associated Costs

Example of Cost-Benefit Analysis Formula (With Excel Template)Let’s take an example to understand the calculation of Cost-Benefit Analysis in a better manner.

You can download this Cost-Benefit Analysis Excel Template here – Cost-Benefit Analysis Excel Template

Cost-Benefit Analysis Formula – Example #1Let us take the example of a financial technology start-up which is contemplating on hiring two new programmers. The promoter expects the programmers to increase the revenue by 25% while incurring an additional cost of $45,000 in the next one year. The help promoter decides whether to go ahead with the recruitment based on cost-benefit analysis if the revenue of the company in the current year is $220,000 and the relevant discount rate is 5%.

Solution:

PV of Benefit is Calculated as:

PV of Benefit= $55,000 / (1 + 5%)

PV of Benefit = $52,380.95

PV of Cost is Calculated as:

PV of Cost = $35,000 / (1 + 5%)

PV of Cost = $33,333.33

Benefit-Cost Ratio is calculated using the formula given below

Benefit-Cost Ratio = ∑PV of all the Expected Benefits / ∑PV of all the Associated Costs

Benefit-Cost Ratio = $52,380.95 / $33,333.33

Benefit-Cost Ratio = 1.57x

Net Present Value is calculated using the formula given below

Net Present Value = ∑PV of all the Expected Benefits – ∑PV of all the Associated Costs

Net Present Value = $52,380.95 – $33,333.33

Net Present Value = $19,047.62

Therefore, both the method of cost-benefit analysis suggests that the promoter should go ahead with the recruitment.

Cost-Benefit Analysis Formula – Example #2Let us take the example of two projects to illustrate the use of cost-benefit analysis. The sum of the present value of expected benefits from Project 1 is $50 million with the sum of the present value of associated costs of $30 million. On the other hand, the sum of the present value of expected benefits from Project 2 is $10 million with the sum of the present value of associated costs of $5 million. Discuss which project is better based on cost-benefit analysis.

Solution:

Benefit-Cost Ratio is calculated using the formula given below

Benefit-Cost Ratio = ∑PV of all the Expected Benefits / ∑PV of all the Associated Costs

For Project 1

Benefit-Cost Ratio = $50,000,000 / $30,000,000

Benefit-Cost Ratio = 1.67x

For Project 2

Benefit-Cost Ratio = $10,000,000 / $5,000,000

Benefit-Cost Ratio = 2.00x

Net Present Value is calculated using the formula given below

Net Present Value = ∑PV of all the Expected Benefits – ∑PV of all the Associated Costs

For Project 1

Net Present Value = $50,000,000 – $30,000,000

Net Present Value = $20,000,000

For Project 2

Net Present Value = $10,000,000 – $5,000,000

Net Present Value = $5,000,000

ExplanationThe formula for cost-benefit analysis can be calculated by using the following steps:

Step 1: Firstly, Calculate all the cash inflow from the subject project, which is either revenue generation or savings due to operational efficiency.

Step 2: Next, Calculate all the cash outflow into the project, which are the costs incurred in order to maintain and keep the project up and running.

Step 3: Next, Calculate the discounting factor based on the current pricing of assets with a similar risk profile.

Step 4: Next, based on the discounting factor, calculate the present value of all the cash inflow and outflow. Then, add up the present value of all the cash inflow as ∑PV of all the expected benefits and outflow as ∑PV of all the associated costs.

Step 5: Now, the formula for a benefit-cost ratio can be derived by dividing aggregate of the present value of all the expected benefits (step 4) by aggregate of the present value of all the associated costs (step 4) as shown below.

Benefit-Cost Ratio = ∑PV of all the Expected Benefits / ∑PV of all the Associated Costs

Step 6: Now, the formula for net present value can be derived by deducting the sum of the present value of all the associated costs (step 4) from the sum of the present value of all the expected benefits (step 4) as shown below.

Net Present Value = ∑PV of all the Expected Benefits – ∑PV of all the Associated Costs

Relevance and Use of Cost-Benefit Analysis FormulaThe importance of cost-benefit analysis lies in the fact that it is used for assessing the feasibility of an opportunity, comparing projects, appraising opportunity cost and building real-life scenario-based sensitivity testing. In this way, this technique helps in ascertaining the accuracy of an investment decision and provides a platform for its comparison with similar proposals.

Cost-Benefit Analysis Formula CalculatorYou can use the following Cost-Benefit Analysis Formula Calculator

∑PV of all the Expected Benefits ∑PV of all the Associated Costs Benefit-Cost Ratio Benefit-Cost Ratio = ∑PV of all the Expected Benefits =

∑PV of all the Associated Costs

0

= 0

0

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This is a guide to Cost-Benefit Analysis Formula. Here we discuss how to calculate the Cost-Benefit Analysis Formula along with practical examples. We also provide a Cost-Benefit Analysis calculator with a downloadable excel template. You may also look at the following articles to learn more –

## How To Calculate Age In Excel Using Formulas + Free Calculator Template

Watch Video – How to Calculate Age in Excel (in Years, Months, and Days)

Using a combination of Excel functions and the date of birth, you can easily calculate age in Excel. You can either calculate the age till the current date or between the specified period of time.

The technique shown here can also be used in other situations such as calculating the duration of a project or the tenure of the service.

In this tutorial, you’ll learn how to calculate age in Excel in:

The number of years elapsed till the specified date.

The number of Years, Months, and Days elapsed till the specified date.

You can also download the Excel Age Calculator Template.

Suppose you have the date of birth in cell B1, and you want to calculate how many years have elapsed since that date, here is the formula that’ll give you the result:

=DATEDIF(B1,TODAY(),"Y")

If you have the current date (or the end date) in a cell, you can use the reference instead of the TODAY function. For example, if you have the current date in cell B2, you can use the formula:

=DATEDIF(B1,B2,"Y")

DATEDIF function is provided for the compatibility with Lotus 1-2-3.

One of the things that you’ll notice when you use this function is that there is no IntelliSense available for this function. No tooltip appears when you use this function.

This means that while you can use this function in Excel, you need to know the syntax and how many arguments this function takes.

If you’re interested in knowing more about DATEDIF function, read the content of the box below. If not, you can skip this and move to the next section.

Syntax of DATEDIF function:

=DATEDIF(start_date, end_date, unit)It takes 3 arguments:

start_date: It’s a date that represents the starting date value of the period. It can be entered as text strings in double-quotes, as serial numbers, or as a result of some other function, such as DATE().

end_date: It’s a date that represents the end date value of the period. It can be entered as text strings in double-quotes, as serial numbers, or as a result of some other function, such as DATE().

unit: This would determine what type of result you get from this function. There are six different output that you can get from the DATEDIF function, based on what unit you use. Here are the units that you can use:

“Y” – returns the number of completed years in the specified time period.

“M” – returns the number of completed months in the specified time period.

“D” – returns the number of completed days in the specified period.

“MD” – returns the number of days in the period, but doesn’t count the ones in the Years and Months that have been completed.

“YM” – returns the number of months in the period, but doesn’t count the ones in the years that have been completed.

“YD” – returns the number of days in the period, but doesn’t count the ones in the years that have been completed.

You can also use the YEARFRAC function to calculate the age in Excel (in years) in the specified date range.

Here is the formula:

=INT(YEARFRAC(B1,TODAY()))

The YEARFRAC function returns the number of years between the two specified dates and then the INT function returns only the integer part of the value.

NOTE: It’s a good practice to use the DATE function to get the date value. It avoids any erroneous results that may occur when entering the date as text or any other format (which is not an acceptable date format).

Also read: How To Calculate Time In ExcelSuppose you have the date of birth in cell A1, here are the formulas:

To get the year value:

=DATEDIF(B1,TODAY(),"Y")

To get the month value:

=DATEDIF(B1,TODAY(),"YM")

To get the day value:

=DATEDIF(B1,TODAY(),"MD")

Now that you know how to calculate the years, months and days, you can combine these three to get a text that says 26 Years, 2 Months, and 13 Days. Here is the formula that will get this done:

=DATEDIF(B1,TODAY(),"Y")&" Years "&DATEDIF(B1,TODAY(),"YM")&" Months "&DATEDIF(B1,TODAY(),"MD")&" Days"

Note that the TODAY function is volatile and its value would change every day whenever you open the workbook or there is a change in it. If you want to keep the result as is, convert the formula result to a static value.

Excel Functions Used:

Here is a list of functions used in this tutorial:

DATEDIF() – This function calculates the number of days, months, and years between two specified dates.

TODAY() – It gives the current date value.

YEARFRAC() – It takes the start date and the end date and gives you the number of years that have passed between the two dates. For example, if someone’s date of birth is 01-01-1990, and the current date is 15-06-2023, the formula would return 26.455. Here the integer part represents the number of years completed, and the decimal part represents additional days that have passed after 26 years.

DATE() – It returns the date value when you specify the Year, Month, and Day value arguments.

INT() – This returns the integer part of a value.

You May Also Like the Following Excel Tutorials:

## How To Use Val Function In Excel Vba With Excel Template

VBA Val Function

VBA Val stands for Value. It converts the arrays or string which has some numbers into pure numerical values. Suppose if we give “111 One” as input then we will get only “111” as numerical output. This is quite useful while working in a data which we extract from some kind of database. In that database file, we may encounter such cells which may contain numbers along with extra spaces, hidden characters, special characters or alphabets. In that case, using Val can convert that string into numbers. Which can be used in further analysis.

How to Use Excel Val Function in VBA?Let’s see the examples of Val in Excel VBA.

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You can download this VBA VAL Excel Template here – VBA VAL Excel Template

Example #1 – VBA ValIt is quite easy to implement. For multiple types of applications and codes, we will first form a frame of code which we will be using multiple times in further examples.

Step 1: Go to Insert menu tab and select a Module as shown below.

Step 2: After that, we will get the blank window of Module. In that, write the sub category of VBA Val in excel or you can use any other name of subcategory as per your need.

Code:

Sub

VBA_Val()End Sub

Code:

Sub

VBA_Val()Dim

AAs Variant

End Sub

Step 4: And now assign any type of number sequence to variable A under VBA function VAL. We have assigned a combination of sequential number for demonstration as shown below with spaces between them.

Code:

Sub

VBA_Val() Dim A As Variant A = Val("11 22 33")End Sub

Step 5: At last we will need a message box to print the values stored in variable A.

Code:

Sub

VBA_Val()Dim

AAs Variant

A = Val("11 22 33") MsgBox AEnd Sub

Example #2 – VBA ValIn this example, we will see how VBA Val function is used for number containing some mathematical signs. For this, we will consider the code written above. We have taken out the frame of the code which will be used all the examples, as shown below.

Step 1: Go to Insert menu tab and select a Module as shown below

Step 2: As highlighted in the below screenshot, we will keep updating the value between brackets of VAL Function.

Code:

Sub

VBA_Val2()Dim

AAs Variant

A = Val("") MsgBox AEnd Sub

Step 3: Now let’s insert any number with mathematical sign plus (“+”) as shown below.

Code:

Sub

VBA_Val2()Dim

AAs Variant

A = Val("+111") MsgBox AEnd Sub

Step 4: Now compile and run the code. We will see, VBA Val has given the values as 111 without the plus sign. It is because logically all the values with or without plus signs are always positive in nature.

Step 5: Let’s change the value in Val function from +111 to -111. Now we will see if minus sign gets converted into the value or not.

Code:

Sub

VBA_Val2()Dim

AAs Variant

A = Val("-111") MsgBox AEnd Sub

Step 6: Compile the code and run. We will see, the minus sign is still retained in the value and message box has returned the value as -111. Which means any sign other than plus will not get converted with Val function in VBA.

Example #3 – VBA ValIn this example, we will see, how Val function would work for time formats.

Step 1: For this again we will use the above-defined format for Excel VBA Val as shown below.

Code:

Sub

VBA_Val3()Dim

AAs Variant

A = Val("") MsgBox AEnd Sub

Step 2: Now insert any time format in VAL function as circled in the above screenshot. Here we are adding 11 AM as shown below.

Code:

Sub

VBA_Val3()Dim

AAs Variant

A = Val("11 AM") MsgBox AEnd Sub

Step 3: Now compile the code and run. We will see, VAL function has eliminated AM from 11 AM and given us only 11 as output as shown below.

Step 4: Now let’s use some different format. Use any minutes with hours. We have used value 11:05 under Val brackets.

Code:

Sub

VBA_Val3()Dim

AAs Variant

A = Val("11:05 AM") MsgBox AEnd Sub

Step 5: Again compile and run the code. Again Val function has removed colon and minutes numbers along with AM and given us the whole number 11 as shown below.

Example #4 – VBA ValIn this example, we will see how the date format works in this.

Code:

Sub

VBA_Val4()Dim

AAs Variant

A = Val("") MsgBox AEnd Sub

Step 2: Now insert any date format as per your need. We can insert data in a hyphen (“-“) format in a slash (“ / “) format. Let’s use the slash date format which is most often used.

Code:

Sub

VBA_Val4()Dim

AAs Variant

A = Val("06/26/2023") MsgBox AEnd Sub

Step 3: Now compile the code and run it. We will see VBA Val has returned the numerical values as “6”. Values after slash are not accepted by VBA Val.

Example #5 – VBA ValIn this example, we will see how this will work when the numbers are after the text.

Step 1: Take the format which we have seen above.

Code:

Sub

VBA_Val2()Dim

AAs Variant

A = Val("") MsgBox AEnd Sub

Step 2: In Val function brackets, let’s put some text and numbers. Let’s consider “AB 11” as shown below.

Code:

Sub

VBA_Val2()Dim

AAs Variant

A = Val("AB 11") MsgBox AEnd Sub

Step 3: Now run it. We will see, in the message box, only 0 is appearing. Which means VBA Val doesn’t consider the numbers after characters or text.

Pros of VBA Val

It can be used in the data which is extracted from some kind of tool or database. Which consists of different kind of characters along with numbers.

It is quite easy to separate numbers by using VBA Val in any kind data.

We can choose any format which consists of a number or set of number to separate it from other characters.

Things to Remember

It also considers the decimals.

Save the file as Marco enable excel so that written would be retained.

If record this process in VBA, then obtained code will be much lengthier than the examples which we have seen above.

There is not an alternate insert function available in Excel which gives the same result as VBA Val.

Recommended ArticlesThis is a guide to VBA Val. Here we discuss how to get Val in VBA Excel along with practical examples and downloadable excel template. You can also go through our other suggested articles –

## Ipmt In Excel How To Use Ipmt Function In Excel? (With Examples)

IPMT Function in Excel

IPMT Function calculates a specific portion of interest based on the loan amount and tenure. The syntax of IPMT is quite similar to the syntax of PV Function in Excel, which all have seen earlier. To understand better, IPMT helps used to distinguish between different portions or segments of any loan and to what time how small amount is to be paid based on the interest applicable can be calculated.

IPMT Formula in Excel:

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Explanation of IPMT Function in ExcelThere are six parameters used for the IPMT function. Four parameters are compulsory, and two are optional.

Parameter details are as follows:

Compulsory Parameters:

Rate: The interest rate per period.

Per: The period for which you want to find the interest and must be in the range 1 to n per.

Nper: The total number of payment periods in an annuity.

Pv: The present value, or the lump-sum amount that a series of future payments is worth right now.

Optional Parameters:

[FV]: It is an optional argument. The FV or a cash balance you want to attain after the last payment is made. If FV is omitted, excel assumes it to be 0 (the future value of a loan, for example, is 0).

[Type]: This is also an optional argument. The number 0 or 1 indicates when payments are due. If this argument is omitted, Excel assumes it to be 0.

The Type can be 0 or 1, where:

1 = The payment is made at the start of the period.

How to Use the IPMT Function in Excel?IPMT function in Excel can be used as a worksheet function and a VBA Function. Here are some examples of the IPMT functions to understand the working of the IPMT function in Excel.

You can download this IPMT Function in Excel Template here – IPMT Function in Excel Template

Example #1Interest payment made for months 1 and 2 of a loan of $70,000, which is to be paid after 6 years. An interest rate of 6% per year, and the payment to the loan is to be made at the end of each month.

Result is :

To convert the annual interest rate of 6% into the monthly rate (=6%/12) and the number of periods from years to months (=6*12).

Example #2Interest during quarters 1 and 2 of an investment is required to increase investment from $0 to $6,000 over 3 years. The interest rate of 4.5% per year, and the payment into the investment is to be made at the beginning of each quarter.

Result is :

The annual interest rate has been converted into a quarterly rate (4.5%/4)

The number of periods has been converted from years to quarters (=3*4).

The [type]argument has been set to 1 to indicate that the payment will be made at the start of each quarter.

The interest for the first quarter is zero, as the first payment is made at the start of the quarter.

Note:

* Use N%/12 for rate and N*12 for nper when there are monthly payments. N%/4 for rate and N*4 for nper when quarterly payments and N% for rate and N for nper when there are annual payments.

*Cash paid out is shown as negative numbers. Cash received is shown as positive numbers.

Things to RememberBelow are a few error details that can come in the IPMT function as the wrong argument will be passed in the functions.

2. Error handling #VALUE!: IPMT function through a #VALUE! Error when any non-numeric.

VBA Function Example:

The IPMT function can also be used in VBA code.

For example:

Recommended ArticlesThis has been a guide to IPMT in Excel. Here we discuss the IPMT Formula in Excel and how to use the IPMT function in Excel, along with practical examples and downloadable Excel templates. You can also go through our other suggested articles –

## Linest In Excel (Formula, Examples)

LINEST in Excel

Linest function in excel is a statistical function used to calculate straight-line statistics and return an array from the available selected data, which also describes that line. In other words, the Linest function calculates the statistics of a simple line equation (Y = mx + C) which also explains the relationship between the dependent and independent variables using the least square procedure to find the best solution for the data used.

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LINEST Formula in ExcelBelow is the LINEST Formula in Excel :

LINEST Function in Excel includes the following parameters:

known_y’s: The known y’s is n range or array of y values from the line equation.

known_x’s: The known x’s is a range or array of x values from the line equation. If this x value is null, excel will assume those x_values as 1,2,3..with the same number of values as y values.

const: The const is a logical value that specifies either “TRUE” or “ FALSE”.

stats: The stat is a logical value that specifies either to return additional regression statistics, i.e. “TRUE” or “FALSE”, which function needs to return the statistics on the line of best fit.

Steps to Use the LINEST Function in Excel How to Use the LINEST Function in Excel?LINEST Function in Excel is very simple and easy to use. Let us understand the working of the LINEST Function in Excel by some LINEST Formula example.

You can download this LINEST?Function Excel Template here – LINEST?Function Excel Template

Example #1To use the LINEST as an array formula then, you need to do the following steps :

Select the cell where the function is and press f2.

Press CTRL +SHIFT +ENTER.

In this LINEST Function in Excel example, we will see how the LINEST function works with the data. Enter the data in Excel with two data captions named X and Y.

In order to use the LINEST function to find the exact result, Go to Formulas and choose the More function. Choose the LINEST Function under the statistical category, as shown below.

Choose the LINEST function, and you will get the below dialog box as shown below:

You will get the same value which is the coefficient m in the equation y=mx+b

So the result will be :

As mentioned above, we must press CTRL+SHIFT+ENTER to get the exact data. Now we can see that formula is enclosed with two parentheses, i.e. { } where the LINEST function is evaluated.

We can mention a straight line with slope and y-intercept. In order to get the intercept and slope regression, we can use the LINEST function lets see an example with step by step procedure.

Example #2In this example, we will see how to use the LINEST function in Excel. This function is used to calculate the line of Coefficient.

Line Equation: Y=mx+c

Using LINEST Function in Excel, we are going to calculate:

A line of Best Fit gradient

A line of best-fit intercept

The standard error of the gradient

The standard error of the intercept

R2

Regression Sum of squares

Residual sum of squares.

Consider the below data, which has X1 and Y1 values shown below:

To calculate the above equation, select the cell and insert the LINEST function shown below.

Use CTRL+SHIFT+ENTER to get all values where we can see the formula contains open and closing parenthesis.

Let’s see the same data how we can derive the same equation in a chart :

So that scatter chart graph will be displayed with the selected x and y data.

Now we will add a trend line to show exactly by selecting the scattered graph below.

Once you select the option “Add Trendline,” a new trend line will be added in the chart, as shown below.

It shows various statistical parameters like exponential, Liner, Logarithmic, and polynomial.

Here choose the polynomial option with an order 2, as shown below screenshot.

Scroll down and check to mark the display equation on the chart and display an R-Square value in the chart.

So the equation has been displayed in the chart as shown below with the same line equation.

Example #3 – LINEST Functioning for Multiple Range of X Values:Consider the below example, which has the same X1 and Y data and X2 values.

The following chart has been evaluated by using the scattered graph by adding a trend line function.

Assume the equation for Y=b+m1*X1+m2*X2

Lines Function : LINEST (Known_y’s,[Known_X’s],[const],[stats])

Consider the below array of a table which denotes as follows:

Where

m1 – denotes X

m2- denotes X2

Const- denotes b

LINEST Function Used in Earlier & Latest Versions:

In the earlier version, the LINEST function is used as a formula that is not correct to find the total sum of squares if the third argument to the LINEST function is set to false, and this causes an invalid value for the regression sum of squares. Also, values are incorrect for the other output sum of squares. The collinearity value caused a round of error, standard errors of regression coefficient that are not given exact results, and degrees of freedom that are not appropriate.

In Excel 2003 LINEST function has been improved and given good results by adding the TREND function to make it appropriate.

Things to Remember

The LINEST function in Excel should be used with appropriate values; if not, we will not get the exact result.

The LINEST function in Excel will not work If the array of Known_x’s is not as same as the array of Known_y’s.

Recommended ArticlesThis has been a guide to the LINEST in Excel. Here we discuss the LINEST Formula in Excel and How to use the LINEST Function in Excel, along with practical examples and a downloadable Excel template. You can also go through our other suggested articles –

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