Financial functions in excel are special operations that perform calculations based on different variables that you provide. These functions can help you manage your personal finances and make them easier to understand by reducing the number of calculations needed. In this article, you’ll learn about some of the most useful functions in Excel that are useful for personal and business finances.

You can use these functions to calculate interest rates, determine a loan payment, calculate stock values, and find total values for different cells. You can also use the optional financial functions such as the Interest Rate Function (IRR) and the Stock Value of Company (STDEV, STDEV_C, VAR) function to recalculate historical data and gain extra insights into your finances and investments.

Getting Started: Useful Excel Financial Functions and How to Use Them

To get started, let’s first learn about the advantages of using Excel’s financial functions. With the help of these functions, you can reduce the number of calculations needed to compare and analyze different financial data. For example, you can use the Interest Rate Function to determine the annual percentage interest on a loan. Excel’s financial functions can help you get a better understanding of your finances by reducing the number of calculations needed to obtain an outcome.

Interest Rate Function (IRR)

The Interest Rate Function in Excel can help you find the annual percentage interest on a loan. Let’s say you take out a $10,000 loan at a 12% interest rate. To find the annual percentage interest on this loan, you simply enter the formula Interest Rate($10,000 / 12,000), press the Ctrl + Shift + Enter keys, and Excel will calculate the result.

The formula for Interest Rate returns the annual percentage interest on a loan amount as a decimal in the range of 0 to 2. The higher the rate, the lower the decimal. If the loan is a low-interest one, it’ll be 0.00% and if it’s a high-interest one, it’ll be 12.00%.

Loan Payment Formula

The Loan Payment Formula in Excel can help you determine the monthly payment on a loan. To find the monthly payment on a $10,000 loan at 12% interest rate, simply enter the formula Loan Payment($10,000 / 12,000,12%) and press the Ctrl + Shift + Enter keys to calculate the result.

The formula for Loan Payment returns the monthly payment on a loan amount as a decimal in the range of 0 to 12 in the range of 0 to 1. You can also change the formatting of this formula to display the payment in a different way. For example, if you want to show the payment in dollars and cents, you can change the text to dollars by pressing the = sign next to the text.

Stock Value of Company (STDEV, STDEV_C, VAR)

The Stock Value of Company (STDEV, STDEV_C, VAR) financial function in Excel can help you find the stock’s historical average price-per-share. The stock’s historical average price-per-share is important for equity investments and can help you gain insights into the price movement of the said stock.

The stock’s historical average price-per-share can also be used to find the expected return on equity investments to get a better understanding of your expected return. To get the stock’s historical average price-per-share, enter the formula STDEV($10,000, Company_name), press the Ctrl + Shift + Enter keys to calculate the result, and then press the Enter key again to calculate the result.

The formula for STDEV returns the stock’s historical average price-per-share as a decimal in the range of 0 to 2. The higher the historical average price-per-share, the lower the decimal. You can also change the format of this formula by pressing the format buttons next to the STDEV function.

Counting Cells (CTR) and Finding Total (COUNTA)

The Counting Cells (CTR) and Finding Total (COUNTA) financial functions in Excel can help you find out how many cells have a specific value in a specific column or a specific row. The counting cells function can be used to count the number of cells that have a specific value such as 1,2,3,4, etc.

The finding total function can be used to find the total value of all cells in a specific column or a specific row. To count the number of cells having a specific value, enter the formula =COUNTIF($A$2:$A$400,1), press the F2 key to calculate the result, and then press the Enter key to calculate the result.

The formula for CTR returns the number of cells having a specific value in a specific column as a decimal in the range of 0 to 3. You can change the format of the CTR function by pressing the buttons next to the result.

Summing Two Values (ADD, SUM)

The Summing Two Values (ADD, SUM) financial functions in Excel can help you add two values together. The ADD function can be used to add two values together and can also be used to add or subtract two values. The SUM function can be used to find the total value of a cell and can also be used to find the total value of a range of cells. To add two values together, enter the formula =ADD($A$2, $A$3), press the F2 key to calculate the result, and then press the Enter key to calculate the result.

The formula for SUM returns the total value of two values as a decimal in the range of 0 to 2. You can change the format of SUM by pressing the buttons next to the result.

Discount and yield functions

The Discount and yield functions in Excel can help you find the discount or the yield on an investment. To find out the discount on an investment, enter the formula =TRANSLATE(YIELDPRICE($10,000),0.00), press the F2 key to calculate the result, and then press the Enter key to calculate the result.

The formula for TRANSLATE returns the annual percentage yield on a $10,000 investment as a decimal in the range of 0 to 2. You can change the format of the yield price by pressing the buttons next to the result.

Indirect Function in Excel

As a financial analyst, one useful function to explore is the Indirect function in Excel. It allows us to summarize data on a single sheet from multiple workbooks/sheets in Excel. When we are doing different analysis separately, the data may be all over the place. In those cases, it is useful to aggregate all the results on a single sheet so that the audience can get the full picture at one place. This is the case many times for a financial analyst and hence the Indirect function becomes a very useful way to explore this.

Useful combination of Financial Functions in Excel?

There are many other financial functions in Excel that you can use to calculate and analyze your finances. You can also use Excel’s built-in functions to calculate the interest rate on a loan, calculate the average value of a stock, or determine the total payment on a loan. One of the best things about Excel’s financial functions is that you can use them to recalculate historical data and analyze your finances with a single formula.

For example, let’s say you want to find the total amount of your investments. You can simply enter the formula =STDEV($10,000, Company_name). This formula will calculate the historical average price-per-share of the stock, return the total amount, and then divide it by 10,000. With the help of this formula, you can easily find out the total value of your investments.

Final Words

With all these financial functions in Excel, you can calculate and analyze your finances in a much better way. You can also use financial modeling in excel courses to understand these functions, where you can easily find out the interest rate on a loan, calculate the total payment on a loan, find the discount or the yield on an investment, and so much more.