How to Perform a Z-Score Calculation in Excel
If you’re acquainted with statistics, you’ve probably heard of the phrase “Z-Score.” The Z-Score is the number of standard deviations above or below a data point in statistics.
Z-Score may be calculated in Excel, and it’s a rather simple process. It should be noted that the Z-Score needs a data point, mean value, and standard deviation value. The computation of Z-Score is impossible without them. To make things easier for you, we’ll teach you how to use Excel to compute the Z-Score function.
How to Calculate a Z-Score in Excel
To calculate Z-Score in Excel, you must first understand how Z-Score works in general. Z=(x-)/ is the formula used to compute Z-Score, and the arguments are:
- Z = Z score value.
- X denotes the value that must be standardized.
Simply said, Z-Score is used to calculate the standard deviation of a number above or below a certain data point. You must first get the data point in order to compute it. Subtract the mean value from it, then divide by the standard deviation value.
To compute the Z-Score, you must have a collection of data that includes the mean and standard deviation for the top most variable.
Example for Calculating a Z-Score in Excel
Let’s look at an example of the Z-Score computation in an Excel spreadsheet.
We have a collection of data here that mimics fruit sales. The names of the fruits are shown in the A column from A1 to A7, and their sales are shown in the B column from B1 to B7. We’ll compute the Z-Score for each value in the C column, next to the sales figure.
Let us first compute the Mean and Standard Deviation in the B9 and B10 cells before computing the Z-Score.
In Excel, we utilize the AVERAGE function to determine the mean of the provided data. Because our range is from B2 to B7, we’ll apply the condition: =AVERAGE (B2:B7). As a result, in our case, the mean value is 173.333333.
Similarly, we must compute the Standard Deviation of the same range. In our situation, the standard deviation function will be =STDEVPA (B2:B7). As a result, our example’s standard deviation is 51.5126737.
We must now compute the Z-Score for each value. The Z-Score findings will be shown in the C column, with the corresponding values in the B column.
To compute the Z-Score, remove the mean value from each data point and divide the result by the standard deviation. You may be perplexed at first, but the example will clear things up.
Let’s compute the Z-Score of orange sales in the spreadsheet, which is 122. As a result, the Z-score will be =(B2-B9)/B10. B2 represents the number of sales, B9 represents the range’s mean, and B10 represents the standard deviation.
As a consequence, the first value’s Z-Score is -0.9965815. Similarly, if we do the same thing with the B3, B4, B5, B6, and B7 cells, we’ll receive their Z-Scores. They are 1.2359418, -0.9188677, 0.96416402, 0.77003704, and -1.0547566 in our situation.
So that’s how you compute the Z-Score of any given range. Similarly, if you’re dealing with a large amount of data in a spreadsheet, you may utilize Excel’s XLOOKUP function to locate anything in a table or range.
Automate Your Spreadsheets With the Z-Score Function in Excel
Finally, Z-Score contains some mathematics but is rather simple to grasp. If you don’t want to dive into difficult algebra, the SUMIF function is the way to go.
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