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Coefficient of variation

Excel formula: Coefficient of variation
Generic formula 
=STDEV.P(B5:F5)/AVERAGE(B5:F5)
Explanation 

To calculate coefficient of variation (CV) in Excel you can use the STDEV.P function or STDEV.S function with the AVERAGE function. In the example shown, the the formula in I5 is:

=H5/AVERAGE(B5:F5)

where H5 contains the calculated standard deviation of B5:F5. The result is formatted with the percentage number format.

How this formula works

Coefficient of variation is a measure of relative variability of data with respect to the mean. It represents a ratio of the standard deviation to the mean, and can be a useful way to compare data series when means are different. It is sometimes called relative standard deviation (RSD).

In this contrived example, standard deviation is calculated in column H with the STDEV.P function:

=STDEV.P(B5:F5)

Notice that the standard deviation is the same for all data series (1.414214) even though the means vary substantially. To calculate the coefficient of variation (CV), the formula in I5 is:

=H5/AVERAGE(B5:F5)

This formula picks divides the standard deviation in H5 by the mean of B5:F5, calculated with the AVERAGE function. The result is a decimal value, formatted with the percentage number format.

The calculated CV values show variability with respect mean more clearly. In the first data series, the CV is nearly 50%. In the last data series, the CV is only .12%.

Author 
Dave Bruns

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