The Excel GEOMEAN function calculates the geometric mean. Geometric mean is the average of a set of products — technically, the nth root of n numbers. The general formula for the geometric mean of n numbers is the nth root of their product. The equation looks like this:
For example, given two numbers, 4 and 9, the long-hand calculation for the geometric mean is 6:
The GEOMEAN function takes multiple arguments in the form number1, number2, number3, etc. up to 255 total. Arguments can be a hardcoded constant, a cell reference, or a range. Often, a single range or array is used instead of multiple arguments, as seen in the example worksheet.
In the example shown, GEOMEAN is used to calculate a compound annual growth rate. To do this we use the growth factor values in column D in the GEOMEAN function, then subtract 1. The formula in G7 is:
CAGR stands for Compound Annual Growth Rate. CAGR is the average rate of return for an investment over a period of time. It is the rate of return required for an investment to grow from the starting balance to the...
The Excel AVERAGE function calculates the average (arithmetic mean) of supplied numbers. AVERAGE can handle up to 255 individual arguments, which can include numbers, cell references, ranges, arrays, and constants.
The Excel HARMEAN function returns the harmonic mean for a set of numeric values. The harmonic mean is the reciprocal of the arithmetic mean of reciprocals. Harmonic mean can be used to calculate a mean that reduces the impact of large outliers...