In Excel, the Mean is referred to as the Average. To find the mean of a set of numbers you add all numbers within the group and divide the total by the count of those numbers. In the business sector, the mean is the most commonly used measure to find the average of a set of values. Take Sales for example, it’s not uncommon to use the average sales from a previous year to predict future years’ sales. However, the mean is only as accurate as the data being measured.If there are outliers in either direction they will seriously distort the average pulling it more to the side with an outlier.
The formula or syntax to find the Mean with Excel is =AVERAGE(number1,number2…) you can manually enter the numbers into the formula or you may select a range of cells that have the numbers within them. The formula can also be found in the FORMULAS Tab within the Ribbon, select More Functions and AVERAGE is in the Statistical Menu.click here to read an informative post about sum function in excel.
In the following example, we are evaluating our top ten salespeople on their quarterly sales for the year.
Find the Average in a Row:
To find Amy A’s average sales for the year we could enter =AVERAGE(2500,3850,3500,5500) or =AVERAGE(B2:E2) both formulas would give us the same result of $3,837.50
Find the Average in a Column:
To calculate the Quarter 1 Sales (Column B) enter =AVERAGE(B2:B10) to get $4,200.00
Find the Average in a Range:
Calculating the year’s average sales across all salespeople enter =AVERAGE(B2:E10) to get $3,655.56
Find the Average in Non-Adjacent Cells:
To find the Average 1st Quarter Sales across the North District enter =AVERAGE(C2,C4,C8) to get $4,433.33
Find the Average of a Range and Cell:
Let’s say Herb’s 4th Quarter Sales were actually in the South District even though he’s normally within the East District. To find the average sales for the South District for the year we would need to include Herb H’s 4th Quarter Sales. Enter =AVERAGE(C3:F3,F9,C10:F10) to get $4,266.67.
The AVERAGE function can also be used to find the average percentage, average time, and dates.
Calculate the Average Time:
We know the Average 1st Quarter sales are $4,200.00 but what was the average travel time to get those sales?
=AVERAGE(D2:D10) shows an average travel time of 4 hours and 3 minutes.
Calculate the Average Percentage:
What is the average commission that the salespeople earn?
=AVERAGE(E2:E10) to see a 16% average commission.
Calculate the Average Date:
When do the salespeople typically make their first sale? =AVERAGE(F2:F10) shows the first sale is usually made by 1/31/17.
While using the AVERAGE function is relatively simple and versatile there are a few types of data that will be ignored when Excel is making its calculations.
- A blank cell will not be included in the average
Note: entering a 0 within that blank cell will be included and may likely be an outlier amongst your data which will seriously alter your mean.
- Cells with text data will not be included in the calculations
- Texts with Boolean values, TRUE or FALSE, will not be included.
- Numbers that are written in text (one, two, three) will not be included.
Note: Using the AVERAGEA Function you can include Written Numbers and Boolean Values.