10 Advanced Excel Formulas You Must Know  

Every financial analyst spends more time in Excel than they

may care to admit.  Based on years and years of experience, For a step-by-step explanation or how to use this formula,
we have compiled the most important and advanced Excel please see our free guide on how to use INDEX MATCH in
formulas that every world-class financial analyst must know. Excel.

1. INDEX MATCH 2. IF combined with AND / OR

Formula: Formula: =IF(AND(C2>=C4,C2<=C5),C6,C7)
=INDEX(C3:E9,MATCH(B13,C3:C9,0),MATCH(B14,C3:E3,0))
Anyone who’s spent a great deal of time doing various types of
This is an advanced alternative to the VLOOKUP or HLOOKUP financial modelsknows that nested IF formulas can be a
formulas (which have several drawbacks and nightmare.  Combining IF with the AND or the OR function can
limitations).  INDEX MATCH is a powerful combination of Excel be a great way to keep formulas easier to audit and easier for
formulas that will take your financial analysis and financial other users to understand.  In the example below, you will see
modeling to the next level. how we used the individual functions in combination to create a
more advanced formula.
INDEX returns the value of a cell in a table based on the column
and row number. For a detailed breakdown of how to perform this function in
Excel please see our free guide on how to use IF with AND /
MATCH returns the position of a cell in a row or column. OR.

Here is an example of the INDEX and MATCH formulas

combined together.  In this example, we look up and return a
person’s height based on their name.  Since name and height
are both variables in the formula, we can change both of them!

3. OFFSET combined with SUM or AVERAGE

Formula: =SUM(B4:OFFSET(B4,0,E2-1))
The OFFSET function on its own is not particularly advanced, of cells B4:D4 is 15, which is what the offset and sum formula
but when we combine it with other functions like SUM or gives us. 
AVERAGE we can create a pretty sophisticated formula. 
Suppose you want to create a dynamic function that can sum a 4. CHOOSE
variable number of cells.  With the regular SUM formula, you are Formula: =CHOOSE(choice, option1, option2, option3)
limited to a static calculation, but by adding OFFSET you can
have the cell reference move around. The CHOOSE function is great for scenario analysis in financial
modeling.  It allows you to pick between a specific number of
How it works:  To make this formula work, we substitute ending options, and return the “choice” that you’ve selected.  For
reference cell of the SUM function with the OFFSET function.  example, imagine you have three different assumptions for
This makes the formula dynamic and the cell referenced as E2 revenue growth next year: 5%, 12%, and 18%.  Using the
is where you can tell Excel how many consecutive cells you CHOOSE formula you can return 12% if you tell Excel you want
want to add up. Now we’ve got some advanced Excel formulas! choice #2.

Below is a screenshot of this slightly more sophisticated formula Read more about scenario analysis in Excel.
in action.

   

As you see, the SUM formula starts in cell B4, but it ends with a To see a video demonstration, check out our Advanced Excel
variable, which is the OFFSET formula starting at B4 and Formulas Course.
continuing by the value in E2 (“3”), minus one.  This moves the
end of the sum formula over 2 cells, summing 3 years of data  
(including the starting point).  As you can see in cell F7, the sum
5. XNPV and XIRR example, imagine you want to count all cells that are greater
Formula: =XNPV(discount rate, cash flows, dates) than or equal to 21 (the legal drinking age in the U.S.) to find out
how many bottles of champagne you need for a client event. 
If you’re an analyst working in investment banking, equity You can use COUNTIF as an advanced solution, as shown in
research, or financial planning & analysis (FP&A), or any other the screenshot below.
area of corporate finance that requires discounting cash flows,
then these formulas are a lifesaver!

Simply put, XNPV and XIRR allow you to apply specific dates to
each individual cash flow that’s being discounted.  The problem
with Excel’s basic NPV and IRR formulas is that they assume
the time periods between cash flow are equal.  Routinely, as an
analyst, you’ll have situations where cash flows are not timed
evenly, and this formula is how you fix that.

In our advanced Excel course, we break these formulas down in

even more detail. 

7. PMT and IPMT

Formula: =PMT(interest rate, # of periods, present value)

If you work in commercial banking, real estate, FP&A or any

  financial analyst position that deals with debt schedules, you’ll
want to understand these two detailed formulas.
For a more detailed breakdown, see our free IRR vs XIRR
formulas guide as well as our XNPV guide.  The PMT formula gives you the value of equal payments over
the life of a loan.  You can use it in conjunction with IPMT
6. SUMIF and COUNTIF (which tells you the interest payments for the same type of loan)
Formula: =COUNTIF(D5:D12,”>=21″) then separate principal and interest payments.

These two advanced formulas are great uses of conditional Here is an example of how to use the PMT function to get the
functions.  SUMIF adds all cells that meet certain criteria, and monthly mortgage payment for a $1 million mortgage at 5% for
COUNTIF counts all cells that meet certain criteria. For 30 years.
 9. CONCATENATE
Formula: =A1&” more text”
8. LEN and TRIM
Formulas: =LEN(text) and =TRIM(text) Concatenate is not really a function on its own – it’s just an
innovative way of joining information from different cells and
These are a little less common, but certainly very sophisticated making worksheets more dynamic.  This is a very powerful tool
formulas.  These applications are great for financial for financial analysts performing financial modeling (see our free
analysts who need to organize and manipulate large amounts of financial modeling guide to learn more).
data.  Unfortunately, the data we get is not always perfectly
organized and sometimes there can be issues like extra spaces In the example below, you can see how the text “New York” plus
at the beginning or end of cells “, “ is joined with “NY” to create “New York, NY”. This allows you
to create dynamic headers and labels in worksheets. Now,
In the example below, you can see how the TRIM formula instead of updating cell B8 directly, you can update cells B2 and
cleans up the Excel data. D2 independently.  With a large data set, this is a valuable skill
to have at your disposal.
 
 
10. CELL, LEFT, MID and RIGHT functions
These advanced Excel functions can be combined to create More Excel formulas training
some very advanced and complex formulas to use.  The CELL We hope these top 10 advanced Excel formulas have been
function can return a variety of information about the contents of helpful for you, and they should go a long way to improving your
a cell (such as its name, location, row, column, and more).  The financial analysis and financial modeling skills.
LEFT function can return text from the beginning of a cell (left to
right), MID returns text from any start point of the cell (left to
right), and RIGHT returns text from the end of the cell (right to
left). Excel TEXT Function
Below is an illustration of these three formulas in action.

To see how these can be combined in a powerful way with the

CELL function, we break it down for you step by step in
our advanced Excel formulas class.

Summary 
The Excel TEXT function returns a number in a specified
number format, as text. You can use the TEXT function to
embed formatted numbers inside text.
 Purpose  TEXT formula examples
Convert a number to text in a number format

Return value 
A number as text in the given format.

Syntax  Increment a number in a text string

=TEXT (value, format_text) This formula looks at one way to increment a number that is
embedded in a text string. The purpose of this example to show
how multiple functions can be combined to split, manipulate,
Arguments 
and rejoin values. In the example...
 value - The number to convert.
 format_text - The number format to use.

Usage notes 
Use the TEXT function to convert a number to text in a specific
number format.
Get last entry by month and year
 TEXT is especially useful when you want to embed the
numeric output of a formula or function and present it in a To lookup the last entry in a table by month and year,  you can
particular format inside other text. For example, "Sales last year use the LOOKUP function with the TEXT function. In the
increased by over $43,500", where the number 43500 has been example shown, the formula in F5 is:
formatted with a currency symbol and thousands separator. =LOOKUP(2,1/(TEXT($B$5:$B$13,"mmyy")=TEXT(E5,"...
 format_text must appear in double quotation marks.
 To see examples of number formats that are available,
consult the Format Cells dialog box.

Pad week numbers with zeros

To pad week numbers (or any number) with zeros using a
formula, you can use the TEXT function.  In the example show,
D5 contains this formula: =TEXT(WEEKNUM(B5,21),"00")
Which returns the string "07". How...

Create date range from two dates

To display a date range in one cell based on dates in different
cells, you can use a formula based on the TEXT function. In the
example shown, the formula in cell E5 is: =TEXT(B5,"mmm
Join date and text d")&" -...
To join a date with text, you can use concatenation with the
TEXT function to control the date format. In the example shown,
the formula in E4 is: ="The date is "&TEXT(B4,"dddd, mmmm
yyyy")...

Get days, hours, and minutes between dates

To calculate and display the days, hours, and minutes between
two dates, you can use the TEXT function with a little help from
the INT function. In the example shown, the formula in D5 is:
Get first entry by month and year =INT(C5-B5)&" days...
To lookup the first entry in a table by month and year,  you can
use and array formula based on the INDEX, MATCH, and TEXT
functions. the LOOKUP function with the TEXT function. In the
example shown, the formula in F5...

Last updated date stamp

To add a date stamp in a workbook to indicate a "date last
updated", you can use the TEXT function. In the example
shown, the formula in C5 is: ="Last update: "& TEXT(B5, "ddd,
mmmm d, yyyy...

Partial match against numbers with wildcard

To perform a partial match (a substring match) against
numbers, you can use an array formula based on MATCH and
TEXT. Background Excel supports the wildcard characters "*"
Highlight dates in same month and year and "?". However, if you use wildcards with a...
If you want to use conditional formatting to highlight dates that
are in the same month and year as another date, you can use a
simple formula based on the TEXT function. For example, if you
have dates in the range B4:...

Convert date to Julian format

If you need to convert a date to a Julian date format in Excel,
you can do so by building a formula that uses the TEXT, YEAR,
and DATE functions. Background "Julian date format" refers to
Convert numbers to text a format where the year value...
To convert numbers into text values, you can use the TEXT
function. In the example shown, the formula in C5 is:
=TEXT(B5,"0") Background Normally, you want to maintain
numeric values in Excel, because...

Convert date to text

If you need to convert dates to text (i.e. date to string split, manipulate, and reassemble values using multiple
conversion) , you can use the TEXT function. The TEXT functions in a single formula.
function can use patterns like "dd/mm/yyyy", "yyyy-mm-dd", etc.
How to use concatenation to clarify assumptions
to convert a valid date to a text value....
In this video, we show you how to use concatenation and the
TEXT function to clarify assumptions in a breakeven model. You
can use the same approach to highlight assumptions in any
model.

Related functions 

Get month name from date

If you need to get the month name (i.e. January, February,
March, etc.) from a date, you have several options depending
on your needs. Do you just want to display the month name? If
you only want to display a month...

Excel DOLLAR Function

The Excel DOLLAR function converts a number to text using the
Currency number format. The TEXT function can do the same
thing, and is much more versatile.

Convert date to month and year

To convert a normal Excel date into yyyymm format (e.g.
9/1/2017 > 201709), you can use the TEXT function. In the
example shown, the formula in C6 is: =TEXT(B6,"yyyymm")
How this formula works The TEXT...

How to combine functions in a formula

Combining functions is a core skill you *must* have in order to
move beyond the basics in Excel. In this video, we show how to