Normal Distribution in Excel (NORMDIST)
NORMDIST stands for “Normal Distribution”. NORMDIST in excel is an inbuilt function which is used to calculate the normal distribution for the given mean and given standard deviation in a certain data set, it is used in statistics, this function takes four arguments, the first being the X value and mean and standard deviation as the second and third and cumulative value as the last argument.
The formula of the Normal Distribution in Excel includes 4 arguments.
- X: This is the compulsory argument for NORMDIST function in excel. This the value we are required to calculate the normal distribution in excel.
- Mean: This is the average value of the distribution i.e. Mean value.
- Standard Deviation: This the Standard Deviation of the distribution of the data points.
- Cumulative: This is a logical value. By mentioning TRUE or FALSE we need to mention the type of distribution we are going to use. TRUE means Cumulative Normal Distribution Function and FLASE means Normal Probability Function.
- Note: In Excel 2010 and earlier versions you may get to see Normal Distribution in excel but in 2010 and later version it is replaced by NORMDIST function in excel. Though Normal Distribution in excel still exists in recent versions it may not be available later on. It is still there to support the compatibility.
How to Use NORMDIST in Excel? (with Examples)
I have a stock price data of one of the company. Their stipulated stock price is 115, the overall average stock price is 90 and the SD value is 16.
We need to show the probability of stock price that is slotting at 115.
Let me apply the cumulative NORMDIST in excel.
X we have chosen the initial stock price and for mean we have taken overall average price and for SD we have considered B4 cell value and we have used TRUE (1) as for distribution type.
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The result is 0.9409 that means 94% of the stock price plotting in this range.
If I change the distribution type to the normal distribution (FALSE – 0) we will get the below result.
This means 0.74% of the stock price in this range.
Let me consider the below data for normal distribution in excel.
- Sample of the population i.e. x is 200
- Mean or Average Value is 198
- Standard Deviation is 25
Apply cumulative normal distribution in excel
Excel Normal Distribution value is 0.53188 i.e. 53.18% is the probability.
Things to Remember
- NORMDIST function in Excel is only to support the compatibility of the excel. In 2010 and recent version it is replaced by Normal Distribution in excel.
- NORM.DIST accepts only numerical values.
- The standard deviation of the argument should be greater than zero, otherwise, we will get #NUM! as the error in excel.
- If the supplied arguments are non-numeric we will get #VALUE! As the error.
- The normal distribution in excel is nothing but a bell-shaped curve
- If the data does not include mean and SD we need to calculate both by using the Average function and STDEV.S function respectively.
- Learn more about the bell-shaped curve to understand the NORMDIST Function in Excel better.
This has been a guide to NORMDIST function in Excel. Here we discuss how to use Normal Distribution function in Excel using Formula along with excel example and downloadable excel templates. You may also look at these useful excel tools –