Excel problems in calculating means

BVWireIssue #143-2
August 13, 2014

At the recent NACVA conference in Las Vegas, we heard in several sessions that Excel has some shortfalls and traps when calculating means, especially the harmonic and geometric mean.

Watch out: The GEOMEAN function does not work when negative growth is involved, so you need to use the RATE formula. Also, the HARMEAN function doesn’t work if you use zero or if a negative factor is introduced. In addition, when Excel calculates a standard deviation and coefficient of variation, it uses the arithmetic mean. That means that, if you are using the geometric or harmonic mean, you will have to make those calculations manually.

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