BINOM.DIST Function

Calculate Binomial Distribution in Excel

The BINOM.DIST function is categorized under Excel Statistical functions.FunctionsList of the most important Excel functions for financial analysts. This cheat sheet covers 100s of functions that are critical to know as an Excel analyst It calculates the binomial distribution probability for the number of successes from a specified number of trials. This binomial distribution Excel guide will show you how to use the function, step by step.

The binomial distribution is a statistical measure that is frequently used to indicate the probability of a specific number of successes occurring from a specific number of independent trials. The two forms used are:

• The Probability Mass Function – Calculates the probability of there being exactly x successes from n independent trials
• The Cumulative Distribution Function – Calculates the probability of there being at most x successes from n independent trials

In financial analysisFinancial Analyst Job DescriptionThe financial analyst job description below gives a typical example of all the skills, education, and experience required to be hired for an analyst job at a bank, institution, or corporation. Perform financial forecasting, reporting, and operational metrics tracking, analyze financial data, create financial models, the BINOM.DIST function can be useful in finding out, for example, the probability of publishing a best-selling book from a range of books to be published by a company.

Introduced in Excel 2010, BINOM.DIST function is an updated version of the BINOMDIST function.

Formula for Binomial Distribution

=BINOM.DIST(number_s,trials,probability_s,cumulative)

The BINOM.DIST uses the following arguments:

1. Number_s (required argument) – This is the number of successes in trials.
2. Trials (required argument) – This is the number of independent trials. It must be greater than or equal to 0.
3. Probability_s (required argument) – This is the probability of success in each trial.
4. Cumulative (required argument) – This is a logical value that determines the form of the function. It can either be:
   1. TRUE – Uses the cumulative distribution function.
   2. FALSE – Uses the probability mass function.

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How to use the Binomial Distribution Function in Excel?       

To understand the uses of the BINOM.DIST function, let us consider an example:

Example

Suppose we are given the following data:

The formula for calculating binomial distribution using the cumulative distribution function is shown below:

We get the result below:

The formula for calculating binomial distribution using the probability mass function is shown below:

We get the result below:

A few notes about the BINOM.DIST function

1. The BINOM.DIST function will truncate all numerical values to Integer.
2. #VALUE! error – Occurs when any of the arguments provided is non-numeric.
3. #NUM! error – Occurs when:
   1. The given probability is less than zero or greater than 1.
   2. The given number_s is less than zero or greater than the number of trials.

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Additional resources

Thanks for reading CFI’s guide to the binomial distribution function in Excel! By taking the time to learn and master these functions, you’ll significantly speed up your financial analysis. To learn more, check out these additional CFI resources:

• Excel Functions for FinanceExcel for FinanceThis Excel for Finance guide will teach the top 10 formulas and functions you must know to be a great financial analyst in Excel. This guide has examples, screenshots and step by step instructions. In the end, download the free Excel template that includes all the finance functions covered in the tutorial
• Advanced Excel Formulas Course
• Advanced Excel Formulas You Must KnowAdvanced Excel Formulas Must KnowThese advanced Excel formulas are critical to know and will take your financial analysis skills to the next level. Advanced Excel functions you must know. Learn the top 10 Excel formulas every world-class financial analyst uses on a regular basis. These skills will improve your spreadsheet work in any career
• Excel Shortcuts for PC and MacExcel Shortcuts PC MacExcel Shortcuts - List of the most important & common MS Excel shortcuts for PC & Mac users, finance, accounting professions. Keyboard shortcuts speed up your modeling skills and save time. Learn editing, formatting, navigation, ribbon, paste special, data manipulation, formula and cell editing, and other shortucts