Excel can be a very useful tool when it comes to simplifying complicated calculations in your everyday life. One of the complicated formulas which excel makes it easier is calculating the coefficient of variation. With the help of this article, you can now know how you can easily calculate the coefficient of variation in excel to get useful insights about your data.
However, there is no definite formula to calculate the coefficient of variation. You will have to first calculate the standard deviation and mean. This calculation has been given in detail in the below sections.
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What is the Coefficient of Variation?
When you have two or more data sets, you can compare their relative variability by using a statistical measure called Coefficient of Variation or CV. This measure is calculated by dividing the data set’s standard deviation by its mean and is expressed as a percentage. If you’re interested in learning more about percentage calculations, you can explore how to calculate percentage change in Excel.
What is the Formula to Calculate Coefficient of Variation in Excel?
You can calculate the Coefficient of Variation in Excel by dividing the Standard Deviation by Mean using the formula given below.
Coefficient of Variation (CV) = Standard Deviation / Mean
Here,
- Standard Deviation: “=STDEV.P(A1:A15)”
- Mean: “=AVERAGE (A1:A15)”
How to Calculate the Coefficient of Variation Excel?
- Launch MS Excel and open a workbook which contains the required data set. You can even open a new workbook and create a new data set.
- Now, calculate the Standard Deviation of the given data set by entering the below formula in an empty cell,
=STDEV.P(A1:A15) or =STDEV.S(A1:A15)
(You can change the value of the cell as per your data)
- Next, calculate the Mean of the data set by entering the below formula in an empty cell,
- =AVERAGE (A1:A15)
(You can change the value of the cell as per your data)
- Once you have the Standard Deviation and Mean values of the data set, you can calculate the Coefficient of Variation by entering the below formula in an empty cell,
=Standard deviation value / Mean value
- Enter their obtained values in place of Standard deviation and Mean in the above formula.
- If you get the CV in decimal, you can change it to percentage by selecting the cell with the CV value, clicking on the Home tab, and then selecting the percentage icon in the numbers group.
- Alternatively, you can get the CV value by entering the below formula,
=STDEV.P(A1:A15)/AVERAGE (A1:A15)
(You can change the value of the cell as per your data)
What is the Difference Between STDEV.P and STDEV.S?
In the above section, it was mentioned that you can use both STDEV.P as well as STDEV.S to measure the Coefficient of Variation. Basically, when you use STDEV.P it will give you the Coefficient of Variation of the ‘Population’, while STDEV.S will give you the Coefficient of Variation of the ‘Sample’.
In general sense, when you calculate the Coefficient of Variation of population, the value would be more accurate. However, when you calculate this for a sample, the value is less accurate since it would only be for a part of the population. So, once you know whether your data set is for the population or sample, you can use the required formula accordingly.
Coefficient of Variation in Excel-FAQs
A. You can easily calculate the Coefficient of Variation or CV in Excel by using the below formula.
CV = (Standard Deviation / Mean) * 100.
You can even use Excel functions STDEV.P (for the population) or STDEV.S (for a sample) to calculate CV.
A. To calculate standard deviation and mean, the AVERAGE function can be used. To calculate standard deviation, STDEV.P or STDEV.S can be used.
A. When the Coefficient of Variation percentage is higher, it indicates greater relative data variability. While a lower CV percentage indicates less variability. This is very useful for comparing the data of different datasets.
A. No, the Coefficient of Variation can never be negative. CV is a non-negative value which represents the relative variability as a percentage.
A. When the Coefficient of Variation is high, it means that the degree of variability relative to the mean is higher. This suggests that in comparison to the average value, the data points are more dispersed or spread out.
Conclusion
Suppose you want to calculate the Coefficient of Variation. In that case, you can either use STDEV.P or STDEV.S in the formula depending upon whether you are calculating the CV for the population or a sample. Basically, Coefficient of Variation or CV measures the data variability around its mean. This article gives a clear explanation on how you can calculate CV in MS Excel.
