What is the F.INV (Inverse F Distribution) Function?
The F.INV function is categorized under Statistical functionsFunctionsThe F.INV function is categorized under Statistical functions. It will calculate the inverse of the Cumulative F Distribution for a supplied probability. As a financial analyst, the function is useful in understanding the variability of two data sets. One example is when we wish to analyze the income diversity between. It will calculate the inverse of the Cumulative F Distribution for a supplied probability.
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 understanding the variability of two data sets. One example is when we wish to analyze the income diversity between two regions where the company sells its products.
Formula
=F.INV(probability,deg_freedom1,deg_freedom2)
The F.INV function uses the following arguments:
- Probability (required argument) – It is the probability at which we evaluate the inverse Cumulative F Distribution. The value is between 0 and 1.
- 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.
If p = F.DIST(x,…), then F.INV(p,…) = x.
Here, we need to remember that the F.INV function is the inverse of the cumulative form of the F.DIST function.
That is, if:
F.DIST(x, deg_freedom1, deg_freedom2, True ) = probability
Then, F.INV(probability, deg_freedom1, deg_freedom2) = x
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How to use the F.INV Function in Excel?
To understand the uses of the F.INV function, let us consider an example:
Example
Suppose we are given the data below:
- Probability associated with the F cumulative distribution: 0.4
- Numerator degree of freedom: 4
- Denominator degree of freedom: 2
To find out the inverse of the F Probability Distribution using the F.INV function, we will use the following formula:
We get the result below:
Things to remember about the F.INV 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 probability that is provided is less than 0 or greater than equal to 1.
- The argument deg_freedom1 or deg_freedom2 is less than 1.
- #VALUE! error – Occurs when any of the arguments provided is non-numeric.
- In MS Excel 2010, the F.INV function replaced the FINV function for better accuracy. FINV is still available in Excel but only for compatibility purposes.
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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 modelingFinancial ModelingThe F.INV function is categorized under Statistical functions. It will calculate the inverse of the Cumulative F Distribution for a supplied probability. As a financial analyst, the function is useful in understanding the variability of two data sets. One example is when we wish to analyze the income diversity between and 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