In this article, we will delve into the following topics in detail -

Download the Excel Workbook below to follow along and understand how to display Descriptive Statistics in Excel -

download excel workbookDescriptive-Statistics-in-Excel.xlsx

Introduction to Descriptive Statistics in Excel

Descriptive Statistics is a built-in feature in Excel designed for data analysis. It is included in the Analysis ToolPak of Excel.

These statistics assist in comprehending the central tendency, variability, and distribution of data points. They allow users to gain insights into their data without requiring advanced statistical software.

The various statistical measures provided by descriptive statistics include the following -

• Mean: The average value of the dataset.
• Standard Error: A measure of the discrepancy between predicted and actual values in the dataset.
• Median: The middle value that divides the dataset into two equal parts.
• Mode: The value that appears most frequently in the dataset.
• Standard Deviation: A measure of the dispersion of dataset values from the mean.
• Sample Variance: The square of the standard deviation, indicating the dataset's variability.
• Kurtosis: A measure of the tail behavior in the dataset's distribution.
• Skewness: A measure of the asymmetry in the dataset's distribution.
• Range: The difference between the maximum and minimum values in the dataset.
• Minimum: The lowest value in the dataset.
• Maximum: The highest value in the dataset.
• Sum: The total sum of all values in the dataset.
• Count: The total number of values in the dataset.
• Largest(X): The Xth highest value in the dataset.
• Smallest(X): The Xth lowest value in the dataset.
• Confidence Level(X) Percentage: The confidence level for a specified percentage of the dataset values.

Step-by-Step Guide

Imagine you are an investor monitoring the returns of an investment portfolio over the past year. The portfolio includes various stocks and bonds. You have gathered the monthly returns (in percentage) for each month, resulting in the following dataset:

We can easily follow the steps outlined below to display Descriptive Statistics in Excel for this data -

Before beginning, navigate to the Data Tab in the Excel Ribbon and search for Data Analysis. If it is not visible, follow the steps below to install it. Otherwise, proceed directly to STEP 3.

STEP 1: Use the Search Bar and enter Add-Ins.

STEP 2: Choose Analysis ToolPak and press OK.

STEP 3: Go to Data Tab > Data Analysis.

STEP 4: In the Data Analysis dialog box, select Descriptive Statistics and click OK.

STEP 5: In the Descriptive Statistics dialog box, choose the cell range as Input Range.

STEP 6: Select a cell for Output Range.

STEP 7: Tick the Summary Statistics checkbox and click OK.

The results will now be shown!

Analysis of Results

1. Mean (Average) Return: The portfolio's average monthly return is around 2.5%. This suggests that the portfolio has generally produced positive returns over the year.
2. Median: The median return of 3.4% is near the mean, indicating a relatively symmetric distribution of returns.
3. Mode: The absence of a mode suggests a varied set of returns without a recurring pattern.
4. Standard Deviation: A standard deviation of approximately 2.7% indicates moderate variability in returns around the mean. This implies that the portfolio's performance has been fairly stable, with returns concentrated within this range.
5. Range: A range of 8.3% highlights the spread between the highest and lowest returns, showing potential for significant variability.
6. Minimum Return: The lowest return of -2.1% marks the month with the poorest performance in terms of returns.
7. Maximum Return: The highest return of 6.2% signifies the best-performing month.
8. Sum of Returns: The total sum of all returns is 30.4%, reflecting the overall performance of the portfolio.
9. Count: With 12 monthly returns, the dataset spans a year's performance.

From the descriptive statistics analysis, it can be inferred that the investment portfolio has achieved an average monthly return of about 2.53%, indicating a generally positive performance. The standard deviation of around 2.7% suggests that while there is some variability in returns, it is not excessively high. The closeness of the median to the mean suggests a balanced distribution of returns.

The range of 8.3% highlights the potential for varying performance levels, while the minimum return of -2.1% indicates the portfolio's weakest month. Conversely, the maximum return of 6.2% showcases a strong month for the portfolio.

In financial terms, these descriptive statistics help investors understand the portfolio's risk and return profile, facilitating decision-making and risk assessment.

Further Learning:

• Status Bar Metrics
• 3 Simple Ways to Count Unique Values in Excel
• How to Convert Text to Numbers in Microsoft Excel

Click here to learn more about Analysis ToolPak in Excel!

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