What is the F Distribution Function?
The F.DIST function is categorized under Statistical functionsFunctionsThe F.DIST Function is categorized under Statistical functions. It will calculate the probability density function or the Cumulative Distribution Function for the F Distribution. It measures the degree of diversity between two data sets. For example, if we wish to find out the variability in the IQ scores of females. It will calculate the probability density function or the Cumulative Distribution Function for the F Distribution. It measures the degree of diversity between two data sets.
For example, if we wish to find out the variability in the IQ scores of females vis-à-vis males, we can use the F.DIST function to examine it.
As a financial analystFinancial Analyst Job DescriptionSee a real Financial Analyst Job Description including all the skills, experience, and education required to be the successful candidate for the job. Perform financial forecasting, reporting, and operational metrics tracking, analyze financial data, create financial models, the function is useful in risk management. We can use it to understand and evaluate the extent of losses that a portfolio can suffer.
F Distribution Formula
=F.DIST(x,deg_freedom1,deg_freedom2,cumulative)
The F.DIST function uses the following arguments:
- X (required argument) – It is the value at which we evaluate the function.
- Deg_freedom1 (required argument) – It is an integer specifying numerator degrees of freedom.
- Deg_freedom2 (required argument) – It is an integer specifying denominator degrees of freedom.
- Cumulative (required argument) – It is a logical value that determines the type of F distribution to be calculated. It can either be TRUE (uses the cumulative distributive function) and FALSE (uses the probability density function).
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How to use the F Distribution Function in Excel?
To understand the uses of the F.DIST function, let us consider an example:
Example
Suppose we are given the following data:
- Value at which we wish to evaluate the function: 14.569
- Numerator degree of freedom: 4
- Denominator degree of freedom: 2
To find out the F probability using the cumulative distribution function, which is the TRUE cumulative argument, we will use the following formula:
We get the result below:
To find out the F probability using the probability density function, which is the FALSE cumulative argument, we will use the following formula:
We get the result below:
Things to remember about the F.DIST Function
- If either deg_freedom1 or deg_freedom2 is a decimal number, it is truncated to integers by Excel.
- #NUM! error – Occurs if either:
- The value of x provided is less than 0.
- The argument deg_freedom1 or deg_freedom2 is less than 1.
- #VALUE! error – Occurs when any of the arguments provided is non-numeric.
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Additional resources
Thanks for reading CFI’s guide to important Excel functions! 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 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