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Return on Average Assets Formula

The Formula of Return on Average Assets can be calculated by dividing Company’s Annual Net Income to its Average Total Assets.

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Average Total Assets is calculated using the below formula

In every case, it is not mandatory to have average total assets. In most of the cases return on asset is also used. It is given below.

Generally, banks and other financial institutions utilize a return on average assets to evaluate their performance. It is calculated at period ends, like quarters, years, etc. The return on average assets does not show all the lows and highs. It is, rather, just an average of the period under consideration.

Explanation of Return on Average Assets

A return on average assets ratio is shown as a percentage of all average assets. The return on Average assets ratio often called the return on total assets, is a profitability ratio that calculates the net income produced by total assets during a given period by comparing the net income to the average total assets of the company. In simple words, the ROA or return on assets ratio calculates how efficiently a firm or management of a company can manage its assets to produce profits during a given period. In short, the return on Average assets ratio measures how profitable a firm’s assets are.

Examples of Return on Average Assets Formula

Suppose ABC Company earns \$ 4,000 as annual net income while average assets are \$40,000.

You can download this Return on Average Assets Template here – Return on Average Assets Template

Return on Average Asset can be calculated as:

Return on Average Asset = (Net income)/(Total Average Asset)

Return on Average Asset = (\$ 4,000)/(\$ 40,000)

Return on Average Asset = 10 %

This indicates that the ABC Company has \$0.1 of net income for every dollar of invested assets. Return on assets should be compared with peers in the same industry as a return on assets has stark differences in different industries. So it is wise to compare the return on assets with its peer for a good comparison.

Assume that XYZ company earns a total annual Net Income of \$ 100,000 while beginning total assets are \$600,000 and ending total assets are \$500,000 to calculate Return on Average Assets,

Average Total Assets=(Beginning Total Assets+ Ending Total Assets)/2

The average total assets = (\$ 600,000 + \$ 500,000) / 2

The average total assets = \$ 550,000

According to the Return on Average Assets formula, we get

Return on Average Assets = Net Income / Average Total Assets

Return on Average Assets = \$ 100,000 / \$ 550,000

Return on Average Assets = 18.18 %

Company XYZ earns 18.18 % on its total assets.

Suppose company ABC & XYZ operates in the same industry. If we compare company ABC & company XYZ, company XYZ utilizes its assets more efficiently than company ABC. As company XYZ has more earnings on assets than company ABC. As an investment analyst, investing in a company that utilizes its assets efficiently makes more sense.

Significance and Use of Return on Average Assets Formula

The return on Average Assets formula is an indicator that helps to assess how profitable a company is relative to its total annual assets. Return on Average Assets is a type of Return on investments, so it helps to indicate a company’s performance. Return on Average Assets gives an idea to an analyst, investors, and managers of how efficiently management uses its assets to improve earnings. It generates the profitability of a business in relation to its total annual assets.

Return on Average Assets shows how efficiently management or a company can convert the money used to purchase total assets into profits or net income. It makes sense that a higher ratio is more favorable to the management and investors because it shows that the firm is more effectively operating its assets to produce greater amounts of net profit. For the management, the return on Average Assets ratio is also important because the ratio can tell a lot about the firm’s performance; and by comparing the ratio with similar companies under one industry, management should be able to understand how well the firm is doing.

Return on Average Assets Calculator

You can use the following Return on Average Assets Calculator

Annual Total Income Average Total Assets Return on Average Assets Formula   Return on Average Assets Formula = Annual Total Income =

Average Total Assets

0

= 0

0

Return on Average Assets Formula in Excel (With Excel Template)

Here we will do the same example of the Return on Average Assets formula in Excel. It is very easy and simple. You need to provide the three inputs i.e. Net Income and Total Average Asset.

In the First Example, We calculate the Return on Average Assets using Formula

In the Second Example

first, we calculate the Average total assets.

Then, we calculate the Return on Average Assets using Formula

Recommended Articles

This has been a guide to a Return on Average Assets formula. Here we discuss its uses along with practical examples. We also provide you with Return on Average Assets Calculator with a downloadable Excel template. You may also look at the following articles to learn more –

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## Return On Average Capital Employed

Definition of Return on Average Capital Employed

The term “return on average capital employed” refers to the performance metric that determines how well a company can leverage its capital structure to generate profit. To put it simply, this metric determines the dollar amount that a company is able to produce in net operating profit for each dollar of the capital (both equity and debt) utilized.

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The return on average capital employed is abbreviated as ROACE. This metric is the improved version of ROCE as it takes into account the opening and closing value of the capital employed. ROACE can be used to compare peer performance of a similar scale and with different capital structures as it compares the profitability relative to both equity and debt.

The formula for ROACE can be derived by diving the operating profit or earnings before interest and taxes (EBIT) by the difference between average total assets and average total current liabilities, which is then expressed in terms of percentage. Mathematically, it is represented as,

ROACE = EBIT / (Average Total Assets – Average Total Current Liabilities) * 100

The formula for ROACE can also be expressed as operating profit divided by the summation of average shareholder’s equity and average long term liabilities. Mathematically, it is represented as,

ROACE = EBIT / (Average Shareholder’s Equity + Average Long Term Liabilities) * 100

Examples of Return on Average Capital Employed (With Excel Template)

Let’s take an example to understand the calculation of Return on Average Capital Employed in a better manner.

You can download this Return on Average Capital Employed Excel Template here – Return on Average Capital Employed Excel Template

Example #1

Let us take the example of a company that is engaged in the manufacturing of mobile phone covers. During 2023, the company booked an operating profit of \$22.5 million. Its total assets at the start and end of the year were \$140 million and \$165 million respectively, while its corresponding total current liabilities were \$100 million and \$120 million respectively. Based on the given information, calculate the ROACE of the company for the year.

Solution:

Average Total Assets is calculated using the formula given below

Average Total Assets = (Total Assets at the Start of the Year + Total Assets at the End of the Year)/2

Average Total Assets = (\$140 million + \$165 million) / 2

Average Total Assets = \$152.5 million

Average Current Liabilities is calculated using the formula given below

Average Current Liabilities = (Total Current Liabilities at the Start of the Year + Total Current Liabilities at the End of the Year) / 2

Average Current Liabilities = (\$100 million + \$120 million) / 2

Average Current Liabilities = \$110.0 million

Return on Average Capital Employed is calculated using the formula given below

ROACE = \$22.5 million / (\$152.5 million – \$110.0 million)

ROACE = 52.94%

Therefore, the company’s ROACE for the year 2023 stood healthy at 52.94%.

Example #2

Let us take the example of Walmart Inc.’s annual report for the year 2023 to illustrate the computation of ROACE. During 2023, its operating income was \$20.44 billion, its total assets at the start and at the end of the year was \$198.83 billion and \$204.52 billion respectively and its total current liabilities at the start and at the end of the year was \$66.93 billion and \$78.52 billion respectively. Calculate Walmart Inc.’s ROACE for the year 2023.

Solution:

Average Total Assets is calculated using the formula given below

Average Total Assets = (Total Assets at the Start 2023 + Total Assets at the End of 2023) / 2

Average Total Assets = (\$198.83 billion + \$204.52 billion) / 2

Average Total Assets = \$201.68 billion

Average Current Liabilities is calculated using the formula given below

Average Current Liabilities = (Total Current Liabilities at the Start of 2023 + Total Current Liabilities at the End of 2023) / 2

Average Current Liabilities = (\$66.93 billion + \$78.52 billion) / 2

Average Current Liabilities = \$72.73 billion

Return on Average Capital Employed is calculated using the formula given below

ROACE = EBIT / (Average Total Assets – Average Total Current Liabilities) *100

ROACE = \$20.44 billion / (\$201.68 billion – \$72.73 billion)

ROACE = 15.85%

Therefore, Walmart Inc.’s ROACE stood at 15.85% during the year 2023.

Source: Walmart Annual Reports (Investor Relations)

Advantages of Return on Average Capital Employed

It measures the return on both equity and debt.

It is used to compare the profitability of companies with different capital structures.

Limitations of Return on Average Capital Employed

One of the limitations of return on average capital employed is that it can be manipulated through accounting forgery, such as the classification of long-term liabilities as current liabilities.

Conclusion

So, ROACE is an important financial metric that helps in the evaluation of the overall profitability of a company. However, it is also risks of accounting manipulations and so it is essential that you are cautious while analyzing companies based on ROACE.

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This is a guide to Return on Average Capital Employed. Here we discuss how to calculate Return on Average Capital Employed along with practical examples. We also provide a downloadable excel template. You may also look at the following articles to learn more –

## 5 Top Prime Brokerage Firms For Crypto Assets

Prime brokerage is a suite of services provided by large investment banks, such as Goldman Sachs or Morgan Stanley, whereby they help to facilitate the trading activities of financial institutions such as hedge funds. Services include the lending of securities or cash, leveraged trade executions, asset custody, or preparation of account statements. However, the core service is single access to global liquidity – meaning an institution can conduct all its trading activities in a one-stop-shop, without having to go to multiple trading outlets.

Until recently, these kinds of services weren’t available in the cryptocurrency markets, and so far, none of the large investment banks has ventured into providing these services to crypto investors. Therefore, several firms are now seeking to fill this gap in the market. Because this is a relatively new niche, there is no “one-size-fits-all” approach to the range of services on offer.

TroyTrade is a global prime broker providing a full-stack integrated trading platform alongside a suite of services for institutional clients and professional traders. The Troy trading platform offers single and direct access to global cryptocurrency liquidity across different instruments, including tokens, futures, and other derivatives. The platform is integrated with all the major exchanges including Binance, BitMEX, Coinbase, Kraken and more, offering unparalleled liquidity across all the spot trading pairs and derivatives traded at these venues.

Alongside the trading platform, TroyTrade also offers sophisticated data analytics features, including blockchain data, trading data, market data, and media data. These are optimized with AI and quantitative models to provide meaningful and accurate sentiment analysis of the cryptocurrency markets. Furthermore, clients get access to a brokerage service with real-time fund transfer and settlement, including margin and OTC services.

TroyTrade is powered by the Troy Network, a decentralized protocol for global trading and settlement. In a similar way to exchange tokens like Binance Coin, holders of the TROY token can access benefits such as discounts on trading and margin lending fees.

TroyTrade was founded in 2023 and is backed by investment firms including Block VC and NGC Ventures. The company is led by Kira Sun, who brings extensive experience in designing crypto asset management products, including BVC16 index fund and Pure Alpha fund.

BCB Group

BCB Group is a regulated financial services provider with a focus on digital assets. Like TroyTrade, BCB Group also provides a trading platform as a gateway to the global cryptocurrency markets, offering execution, settlement, and reporting services to institutional clients. The platform supports trading in ten cryptocurrencies, with native onshore settlement in GBP, USD, EUR, CHF, and ZAR or wholesale FX rates for other currencies.

BCB’s trading channels include a web UI, encrypted voice and messaging channels, and a low latency API covering live pricing, trading, and reporting. Compliance is covered through a multitude of real-time transaction and position reporting options.

Founded in 2023, the company is based in London and is regulated in the UK and Switzerland. Alongside the trading platform, the company also offers custody services for digital assets and business accounts to blockchain-based companies.

Quantreq

Quantreq is a cryptocurrency and digital assets capital markets firm. The company provides a variety of services to institutions, including portfolio margin trading, crypto fund administration, and prime brokerage through its QTrade Prime platform.

Using QTrade Prime means crypto funds only need to open one account with Quantreq for trading across 20 exchanges covering spot markets, crypto derivatives and options, and Quantreq’s institutional cryptocurrency lending desk.

The company also gives users access to its multi-signature treasury hot wallet, which enables fast funding of custodial counterparties for quicker trading. The wallet is fully insured. Quantreq also makes its institutional research from market analysts available to users.

Quantreq was founded in 2023 and serves clients in North America, Europe, and Asia.

Tagomi

Tagomi is a cryptocurrency brokerage firm offering a range of services to institutions and individual investors and traders. The trading platform provides access to 14 exchanges via a single account. The company also provides margin, shorting, and lending, along with secure multiparty custody services. Tagomi also commits to providing the details underlying the price of every trade on its platform, as a way of ensuring transparency.

Tagomi’s platform went live at the end of 2023, and the company launched its lending feature in Q3 2023. It has backing from partners including Paradigm and Pantera Capital and was the 18th company to receive the New York Bitlicense.

Caspian

Caspian provides a complete asset management solution. Like the other companies listed here, it provides a single gateway to multiple trading venues. However, the Caspian software also offers other benefits, including a portfolio management system, compliance, and risk management, along with a reporting feature.

Caspian is a joint venture between two companies – Tora Trading Services and Kenetic Trading Systems. Tora is a leading order execution management trading platform for equities and derivatives, while Kenetic is a proprietary trading and investment firm focusing on digital assets and blockchain-related companies. The management team behind Caspian is made up of senior executives from both companies, combining expertise in software, investment, economics, and blockchain development.

Final Thoughts

The emergence of prime trading services is yet more evidence that the cryptocurrency markets are growing up. Over time, it’s likely that more firms, and perhaps even the existing prime brokerage providers from the traditional markets, will enter the digital asset space. If this happens, the incumbents will have to up their game to ensure they’re providing a broad range of world-class services, making them invaluable to their clients.

## Book Value Per Share Formula

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Book Value Per Share Formula

Total liabilities

Total liabilities are the total debt and financial obligations payable by the company to organizations or individuals at any defined period of time. Total liabilities are stated on the balance sheet by the company.

Total Assets

Total Assets are the total amount of assets owned by an entity or an individual. Assets are items of monetary value used over time to produce a benefit for the asset’s holder. If a company owns assets, it includes them in the balance sheet to maintain accurate accounting records.

Examples of Book Value Per Share Formula

Let’s take an example to find out the Book Value Per Share for a company: –

You can download this Book Value per Share Template here – Book Value per Share Template

Example #1

Let’s assume Company Anand Pvt Ltd have worth \$25,000,000 of stockholders’ equity, \$5,000,000 preferred stock, and total outstanding shares of \$10,000,000 shares outstanding. We need to calculate the book value per share for the Anand Group of companies.

Now, we can calculate Book Value Per Share for Anand Pvt Ltd by using the Book Value Per Share Formula:

Stockholder’s Equity = \$25,000,000

Preferred Equity = \$5,000,000

Total Outstanding Common Shares = \$10,000,000

By using the Book Value per Share Formula

Book Value per Share = (Shareholders’ Equity – Preferred Equity) / Total Outstanding Common Shares

Book Value per Share = \$(25,000,000- \$5,000,000) / \$10,000,000

Book Value per Share = \$2

This shows Anand Group of the company has a book value per share of \$2.

Example #2

Jagriti Group of Companies has the following details as per its financials for the year ended 2023-18:

Total assets = \$200,000

Total liabilities = \$50,000

Preferred shares = \$25,000

Number of outstanding common shares = 5000 shares

Therefore,

We need to calculate the Book Value Per Share of Jagriti Group of Companies.

As we can see in the above case, the Shareholder’s Equity is not provided, then we have to calculate Shareholder’s Equity by using the below formula:

Total assets = \$200,000

Total liabilities = \$50,000

Shareholder’s Equity Formula

Shareholder’s Equity =Total assets – Total Liabilities

Shareholder’s equity = \$200,000 – \$50,000

Shareholder’s Equity = \$1,50,000

Now, we have to calculate how much common shareholders will be getting from the shareholders’ equity. So, we must deduct the Preferred stocks from the Shareholders’ equity.

Therefore,

Common shareholders’ equity = Shareholder’s equity – Preferred Share

Common shareholder’s equity = \$1,50,000- \$25,000

Common shareholder’s equity = \$1,25,000

Now by using the below formula, we can calculate Book Value Per Share:

Book Value per Share = (Shareholders’ Equity – Preferred Equity) / Total Outstanding Common Shares

Book Value per share = \$1,50,000- \$25,000/ 5,000

Book Value per share = \$1,25,000/ 5,000

Book Value per share = \$25

Example #3

Calculate the Book Value per share for Anand Group of Companies using the following extracts available:

Current Assets = \$70,000

Non-current Assets = \$230,000

Current Liabilities = \$60,000

Non-Current Liabilities = \$30,000

Preferred shares = \$45,000

Number of outstanding common shares = 3500 shares

For calculating Book Value Per Share, we need Shareholders’ Equity which can be calculated as below:

Total assets = Current Assets + Non-current Assets

Total Liabilities = Current Liabilities + Non-Current Liabilities

Shareholder’s Equity =Total assets – Total Liabilities

Shareholder’s Equity = (Current Assets + Non-current Assets) – (Current Liabilities + Non-Liabilities)

Shareholder’s Equity = (\$70,000 + \$230,000) – (\$60,000 + \$30,000)

Shareholder’s Equity = \$3,00,000 – \$90,000

Shareholder’s Equity = \$2,10,000

Now by using the below formula, we can calculate Book Value Per Share:

Book Value per Share = (Shareholder’s Equity – Preferred Equity) / Total Outstanding Common Shares

Book Value per share = (\$2,10,000- \$45,000)/3500

Book Value per share = \$47.14

The book Value per share of Jagriti Group of Companies is \$47.14.

Explanation

You can calculate the book value per share to determine the value of a company per share. The calculation is based on the equity available to common shareholders after paying off the debts and preferred shareholders for which the company is legally obliged. When calculating Book Value Per Share, one must subtract preferred shares from Shareholder’s Equity.

The “Book Value” of a company, also referred to as Shareholder’s Equity or Owner’s Equity, can be calculated by subtracting Total Liabilities from Total Assets.

Therefore, Shareholder’s Equity =Total assets – Total Liabilities

And, Book Value per Share = (Shareholders’ Equity – Preferred Equity) / Total Outstanding Common Shares. The data mentioned above can be found on the company’s balance sheet.

Significance and Use of Book Value Per Share

The investors can use Book Value per share to determine the equity in a company compared to the current market value of the company, that is, the current price of the stock. For example, Let’s assume Anand Ltd is currently trading for \$30. But it has a book value of \$15. This shows the stock of Anand Ltd is selling at the double, I.e., two times its equity. The above example is used in valuation methodology, i.e., Multiple Valuation (price to book value or P/B) or relative valuation; in this formula, book value per share is used in the denominator.

To compute the return on equity formula, investors can use the book value per share, which abbreviates as ROE. In this scenario, one calculates ROE on a per-share basis.

Simply divide the stockholder’s equity by the net income to calculate the ROE. ROE per share = (Net Income Per share or EPS)/Book Value per share. Per share basis of Net income is referred to as Earnings per share or EPS. As the article demonstrates, the book value per share represents the stockholder’s equity on a per-share basis.

Book Value Per Share Calculator

You can use the following Book Value per Share Calculator

Shareholder’s Equity Preferred Equity Total Outstanding Common Share’s Book Value per Share Formula =   Book Value per Share Formula = Shareholder’s Equity − Preferred Equity = Total Outstanding Common Share’s

0

0

= 0

0

Book Value Per Share Formula in Excel (With Excel Template)

Here we will do the same example of the Book Value per Share in Excel. It is very easy and simple. You need to provide the two inputs, i.e., Shareholders’ Equity and Preferred Equity

You can easily calculate the Book Value per Share using the formula in the template provided.

In this template, we have to solve the Book Value per Share Formula

Hence first, we are calculating the Shareholder’s Equity by using the Shareholder’s Equity Formula.

Now, we will calculate the Book Value per Share by using the formula.

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This has been a guide to Book Value per Share Formula; here, we discuss its uses and practical examples. We also provide a Book Value per Share calculator and a downloadable Excel template.

## Revenue Per Employee Ratio Formula

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Revenue Per Employee Ratio

Analyst always looks to analyze the company financially as well as operationally. It must be remembered that the operational ratios also impact the financial ratio.

As the employee is an integral part of every business, analyzing operational efficiency by analyzing the revenue-per-employee ratio makes more sense. It is the easiest ratio for operational analysis and is easy to interpret also.

Revenue Per Employee Ratio Formula

Revenue Per Employee Ratio Formula –

Generally, the number of employees keeps changing over period of time. Therefore, using an average number of employees during a particular period is good practice. Several employee figures can be found in the annual report of the company. The figure for sales revenue can be taken from the company’s income statement. From the above formula, it can be easily understood that revenue per employee is easy to calculate and interpret. By common sense, the higher the revenue per employee figure is, the better it is. Less revenue per employee shows less efficient operation.

But revenue per employee varies in different industries according to the need of labor requirements. Labor-intensive industries will be having less revenue per employee, whereas less labor-intensive industries will have high revenue per employee.

Examples & Explanation of Revenue Per Employee Ratio Formula

Below table shows the revenue per employee of a labor-intensive and less labor-intensive industry.

You can download this Revenue Per Employee Ratio Template here – Revenue Per Employee Ratio Template

Labour Intensive Industry

Company Name

Net Sales (million \$) Number of Employees

Revenue Per Employee (\$)

Company ABC Ltd.

25,000

80000

3,12,500

Company Aban Ltd.

46,000

90000

5,11,111

Company KPIT Ltd.

23,000

50000

4,60,000

Company PTC Ltd

39,000

75000

Company XYZ Ltd

90,000

180000

5,00,000

Less Labour-Intensive Industry

Company Name Net Sales (million \$) Number of Employees

Revenue Per Employee (\$)

Company PQR Ltd

20000

18000

11,11,111

Company MNO Ltd

5000

1108

45,12,635

Company TPU Ltd

6000

3000

Company KNO Ltd

18000

15000

12,00,000

Company APP Ltd

2000

1500

13,33,333

Analysts generally compare revenue per employee with the median of companies in the same industry. Company MNO operates at the highest revenue per employee in a less labor-intensive industry because its operations are more efficient than its peers. It can be said that each employee in the MNO company is more efficient than the peer set. The same is true for labor-intensive industries.

Significance and Use of Revenue per Employee Ratio Formula

Revenue per employee is an absolute figure regarding a given currency; therefore, it may look less useful in an analytical sense. For interpretation purposes, revenue per employee should be compared with the company’s or industry’s historical data to see any deterioration or improvement. Compare it with the other peer companies operating in the same industry. This comparison across the industry and over time will give a useful understanding of personnel productivity.

Revenue per employee might be affected by the age of a company. New companies usually have small revenues, and these are usually in the process of hiring more employees to fill positions. Therefore, their revenue per employee is lower than that of well-established companies. Sometimes earnings per employee can be calculated using net profit, instead of sales revenue, in the above-stated formula. This also gives insights into the productivity of employees.

As the ratio is in the absolute figure by itself, it is of little use without any benchmark or frame of reference; hence it should be read against the historic ratios for the same industry or company over a number of past years to be able to see if the ratios are falling or rising. This would help to show declining or improving the level of employee productivity. Then again, compare the ratios with other industry peers and their performance over the past years.

Revenue Per Employee Ratio Calculator

You can use the following Revenue Per Employee Ratio Calculator

Total Revenue Number of Employees Revenue Per Employee Ratio Formula=   Revenue Per Employee Ratio Formula= = Total Revenue = Number of Employees

0

= 0

0

Revenue Per Employee Ratio Formula in Excel (With Excel Template)

Here we will do the same example of the Revenue Per Employee Ratio formula in Excel. It is very easy and simple. You need to provide the two inputs i.e, Revenue and Number of Employees

You can easily calculate the Revenue Per Employee Ratio using the Formula in the template provided.

Recommended Articles

This has been a guide to a Revenue Per Employee Ratio formula. Here we discuss its uses along with practical examples. We also provide a revenue-per-employee ratio calculator with a downloadable Excel template. You may also look at the following articles to learn more –

## Rank In Excel (Formula, Examples)

RANK in Excel

The rank function in Excel is used for finding the best sequence position of any selected cell from the given hierarchy or range, which only applies to numbers. And it is because Rank can only be measured in numbers. If we have 5 numbers and want to find the rank (or position) of any number, we simply need to select the range and then choose the order in which rank we want.

RANK Formula in Excel:

Below is the RANK Formula in Excel:

Explanation of RANK Function in Excel

RANK Formula in Excel includes two mandatory arguments and one optional argument.

Number: This is the value or number we want to find the rank.

Ref: This is the list of numbers in a range or in an array you want your “Number” compared to.

[Order]: Whether you want your ranking in Ascending or Descending order. Type 0 for descending and type 1 for ascending order.

Ranking products, people, or services can help you to compare one against another. The best thing is we can see which is at the top, at the average level, and at the bottom.

We can analyze each one of them based on the rank given. If the product or service is at the bottom level, we can study that particular product or service, find the root cause for its poor performance, and take necessary action against it.

Three Different Types of RANK Functions in Excel

If you start typing the RANK function in Excel, it will show you 3 types of RANK functions.

chúng tôi

chúng tôi

RANK

In Excel 2007 and earlier versions, only the RANK Function was available. However, later on, a RANK Function has been replaced by a chúng tôi and chúng tôi functions.

Though the RANK Function still works in recent versions, it may not be available in future versions.

How to Use the RANK Function in Excel?

The RANK Function in Excel is very simple and easy to use. Let us understand the working of the RANK Function in Excel by a RANK Formula example.

You can download this RANK Function Excel Template here – RANK Function Excel Template

Example #1

I have 12 teams that recently participated in the Kabaddi tournament and have team names and their total points in the first two columns.

I had to rank each team when I compared it to other teams on the list.

Since RANK works only for compatibility with earlier versions, I am using chúng tôi function instead of a RANK Function here.

Note: Both work the same way.

Apply the chúng tôi function in cell C2.

So the output will be :

Note: I have not mentioned the order reference. Therefore, excel, by default, ranks in descending order.

=RANK.EQ (B2, \$B\$2:\$B\$13) returned a number (rank) of 12. In this list, I have a total of 12 teams. This team scored 12 points, the lowest among all the 12 teams we have considered. Therefore, the formula ranked it as 12, i.e. the last rank.

=RANK.EQ (B3, \$B\$2:\$B\$13) returned a number (rank) of 1. This team scored 105 points, the highest among all the 12 teams we have considered. Therefore, the formula ranked it as 1, i.e. first rank.

This is how RANK or chúng tôi function helps us find out each team’s rank when we compare against each other in the same group.

Example #2

One common problem with chúng tôi function is if there are two same values, then it gives the same ranking to both the values.

Consider the below data for this example. I have a batsmen’s name and their career average data.

Apply the chúng tôi function in cell C2, and the formula should be like the below one.

=RANK.EQ(B2,\$B\$2:\$B\$6)

So the output will be :

If I apply a RANK formula to this data, Sachin and Dravid get the rank 1.

If the formula finds two duplicate values, it must show 1 for the first-ever value found and the next for the other number.

There are many ways we can find the unique ranks in these cases. In this example, I am using chúng tôi with COUNTIF function.

So the output will be :

The formula I have used here is

=RANK.EQ (B2, \$B\$2:\$B\$6) will find the rank for this set.

COUNTIF (\$B\$2:B2, B2) – 1. The COUNTIF formula will do the magic here. For the first cell, I have mentioned \$B\$2:B2 means at this range, what is the total count of the B2 value, then deduct that value from 1.

The first RANK returns 1, and COUNTIF returns 1, but since we mentioned -1, it becomes zero; therefore, 1+0 = 1. For Sachin, RANK remains 1.

For Dravid, we got the Rank of 2. Here RANK returns 1, but COUNTIF returns 2, but since we mentioned -1, it becomes 1; therefore, 1 + 1 = 2. The rank for Dravid is 2, not 1.

This is how we can get unique ranks in case of duplicate values.

Things to Remember

RANK replaces a RANK chúng tôi in 2010 and later versions.

A RANK Function in Excel can accept only numerical values. Anything other than numerical values, we will get an error as #VALUE!

If the number you are testing is not present in the list of numbers, we will get #N/A! Error.

The RANK function in Excel gives the same ranking in the case of duplicate values. Anyhow, we can get unique ranks by using the COUNTIF function.

Data need not sort in ascending or descending order to get the results.

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This has been a guide to RANK in Excel. Here we discuss the RANK Formula in Excel and How to use a RANK Function in Exel, along with practical examples and a downloadable Excel template. You can also go through our other suggested articles –

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