NORM.S.INV Function in Excel

Article byPradeep S
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

As the name from the formula, we can think that this function calculates the inverse of the normal distribution. For this function, the data set’s mean always remains zero, and the standard deviation is always one. It is also a built-in function in Excel used in statistics such as regression analysis.

NORM.S.INV() Function in Excel

It is a pre-built integrated function in Excel that is categorized under statistical functions in Excel. The NORM.S.INV Excel function is the latest updated version with improved accuracy compared to the older version of this Excel function.

Norm.S.INV

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  • The normal distribution is the most widely used in statistics. It is also called a “Bell curve” or “Gaussian curve.”
  • We can fully describe the normal distribution based on its mean and standard deviation (SD) values.
  • A normal distribution is called “standard normal distribution” when its mean value is “0” or zero, and the standard deviation value is equal to 1.

The normal distributionNormal DistributionNormal Distribution is a bell-shaped frequency distribution curve which helps describe all the possible values a random variable can take within a given range with most of the distribution area is in the middle and few are in the tails, at the extremes. This distribution has two key parameters: the mean (µ) and the standard deviation (σ) which plays a key role in assets return calculation and in risk management strategy.read more can be standardized by using the below-mentioned formula:

z = (x – mean)/ sd

Norm.s.INV graph

Z value on the x-axis is the standard normal deviation. Here, the red arrowed line in the curve indicates where the standard deviation of the mean value is within 1, whereas the green arrowed line in the curve indicates where the standard deviation of the 0mean value is within 2.

Definition of NORM.S.INV Excel Function

The NORM.S.The INV Excel function is used to determine or calculate the inverse normal cumulative distribution for a given probability value.

It returns the inverse of the standard normal cumulative distribution. The distribution has a mean of zero and a standard deviation of one.

Given the probability that a variable is within a certain distance of the mean, it calculates the z value (standard normal deviate), where it corresponds to an area under the curve.

Usually, the area should be between 0 and 1.

The z value (standard normal deviate) corresponds to a one-tailed probability P.

Where P value must be between 0 and 1 (0<P<1).

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NORM.S.INV Formula in Excel

The syntax or formula for the NORM.S.INV function in Microsoft Excel is:

NORM.S.INV Formula in Excel

Its syntax or formula has the below-mentioned argument:

Probability: (Compulsory or required parameter) It is a probability corresponding to the normal distribution.

It is the inverse of the NORM.S.DIST function.

How to Use NORM.S.INV Function in Excel?

Let us look out how the NORM.S.INV Excel function works in Excel.

You can download this NORM.S.INV Function in Excel here – NORM.S.INV Function in Excel

Example #1 – A Probability (P) Value Less Than 0.5

In the below-mentioned example, we have a dataset in a cell “C9,” 0.28, which is a probability value.

Norm.S.INV Example 1

Here, we need to find the approximate value of the inverse of the standard normal cumulative distribution using NORM.S.INV Excel FUNCTION.

Let us apply this function in cell “C13”. But, first, select the cell “C13.”

Norm.S.INV Example 1-1

Click the insert functionInsert FunctionThe Insert function in Excel is not a real function; rather, it is a wizard box that helps users find out what type of function they need in their data. This wizard box can be found under the formula tab in newer versions of Excel.read more button (fx) under the formula toolbar.

Norm.S.INV Example 1-2

A dialogue box will appear.

Norm.S.INV Example 1-3

Type the keyword “NORM” in the search for a function box; various standard normal cumulative distribution equations appear. In that, select NORM.S.INV Excel function.

Norm.S.INV Example 1-4

Probability: It is a probability corresponding to the normal distribution. Here, it is 0.28.

Norm.S.INV Example 1-5

Click “OK,” after inserting the probability argument= NORM.S.INV (0.28).

Norm.S.INV Example 1-7

It returns the approximate inverse value of the standard normal cumulative distribution or standardized normal deviate, -0.582841507.

Norm.S.INV Example 1-6

Example #2 – A Probability (P) Value More Than 0.5

In the below-mentioned example, we have a dataset in a cell “B22,” 0.88, which is a probability value.

Norm.S.INV Example 2-4

Here, we need to find the approximate value of the inverse of the standard normal cumulative distribution using NORMSINV() FUNCTION.

Let us apply this function in cell “B26”. But, first, select the cell “B26.”

Norm.S.INV Example 2

Click the “insert functionInsert FunctionThe Insert function in Excel is not a real function; rather, it is a wizard box that helps users find out what type of function they need in their data. This wizard box can be found under the formula tab in newer versions of Excel.read more” button (fx) under the “Formulas” toolbar.

Norm.S.INV Example 1-2

A dialog box will appear.

Norm.S.INV Example 1-3

Type the keyword “NORM” in the search for a function box; various standard normal cumulative distribution equations appear. In that, select NORM.S.INV() function.

Norm.S.INV Example 1-4

Double click on the function. A dialog box appears where arguments must be filled or entered, i.e., =NORM.S.INV (probability).

Probability: It is a probability corresponding to the normal distribution. Here, it is 0.88.

Norm.S.INV Example 2-1

Click “OK” after entering the probability argument, =NORM.S.INV(0.88).

Norm.S.INV Example 2-2

It returns the approximate inverse value of the standard normal cumulative distribution or standardized normal deviate, 1.174986792.

Norm.S.INV Example 2-3

Example #3 – A Probability (P) Value of 0.51

In the below-mentioned example, we have a dataset in a cell “B32,” 0.51, which is a probability value.

Example 3

Here we need to find the approximate value of the inverse of the standard normal cumulative distribution using the NORM.S.INV() FUNCTION.

Let us apply this function in cell “B37”.

Example 3-1

Click the “Insert Function” button (fx) under the “Formulas” toolbar.

Example 1-2

A dialogue box will appear.

Example 1-3

Type the keyword “NORM” in the search for a function box; various standard normal cumulative distribution equations appear.

Example 1-4

Probability: It is a probability corresponding to the normal distribution. Here, it is 0.51.

Example 3-2

Click ok, after entering the probability argument = NORM.S.INV(0.51)

Example 3-3

It returns the approximate inverse value of the standard normal cumulative distribution or standardized normal deviate, 0.025068908.

Example 3-4

Things to Remember About The NORMSINV() Function in Excel

The most common errors in excelErrors In ExcelErrors in excel are common and often occur at times of applying formulas. The list of nine most common excel errors are - #DIV/0, #N/A, #NAME?, #NULL!, #NUM!, #REF!, #VALUE!, #####, Circular Reference.read more in this function is #NUM! Error and #VALUE! Error.

1. #NUM! Error

#NUM! Error occurs when the given probability argument is less than zero (negative values) or equal to zero or greater than one.

In the below-mentioned table, the cell “B41” value numeric value is 0. But, suppose we apply the NORM.S.INV function, it returns a #NUM! Error.

Errors 1

Similarly, suppose we apply NORM.S.INV() function on the values 1.5 and -1.5 in the cells B42 and B43. It returns a #NUM!Error.

Errors

2. #VALUE! Error

#VALUE! Error occurs#VALUE! Error Occurs#VALUE! Error in Excel represents that the reference cell the user has either entered an incorrect formula or used a wrong data type (mostly numerical data). Sometimes, it is difficult to identify the kind of mistake behind this error.read more if any of the given arguments is text value or non-numeric.

In the table below, cell “B24” contains a text value, the word “TEXT.” Now, if we apply NORM.S.INV Excel function to find out the approximate value of the inverse of the standard normal cumulative distribution; It returns #VALUE! Error.

Errors

The precision or accuracy of these function values depends on the accuracy of NORM.S.INV and NORM.S.DIST. values. It uses an iterative search technique.

This article is a guide to NORM.S.INV Function in Excel. We discuss its uses and how to use NORM.S.INV function in Excel, along with Excel examples and downloadable Excel templates. You may also look at these useful functions in Excel: –

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Comments

  1. Sean W says

    Thank you for posting these articles with explanations, its extremely helpful

    • Dheeraj Vaidya says

      Thanks for your kind words!