What is the F.INV.RT Function?
The F.INV.RT Function is a Statistical functions,FunctionsThe F.INV.RT Function is categorized under Statistical functions. It will calculate the inverse of the (right-tailed) F probability distribution. As a financial analyst, the function is useful in understanding the variability in two data sets. For example, we can use F.INV.RT if we wish to analyze the income diversity that calculates the inverse of the (right-tailed) F probability distribution.
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, this function is useful in understanding the variability in two data sets. For example, we can use F.INV.RT if we wish to analyze the income diversity between two regions where a company sells its products.
F.INV.RT is an updated version of the previous FINV function that is still available on earlier versions of MS Excel.
Formula
=F.INV.RT(probability, deg_freedom1, deg_freedom2)
The F.INV.RT 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 the numerator degrees of freedom.
- Deg_freedom2 (required argument) – It is an integer specifying the denominator degrees of freedom.
If p = F.DIST.RT(x,…), then F.INV.RT(p,…) = x. Here, we need to remember that the Excel F.INV function is the inverse of the cumulative form of the Excel F.DIST function.
That is, if:
F.DIST(x, deg_freedom1, deg_freedom2, True) = probability
Then,
F.INV(probability, deg_freedom1, deg_freedom2) = x
How to use the F.INV.RT Function in Excel?
To understand the uses of the F.INV.RT function, let’s consider an example:
Worked Step-by-Step Example
Suppose we are given the following data:
- The probability associated with the F cumulative distribution: 04
- Numerator degree of freedom: 4
- Denominator degree of freedom: 2
To find out the inverse of the F probability distribution using the F.INV.RT function, we will use the following formula:
We get the result below:
Things to remember about the F.INV.RT Function
- If either deg_freedom1 or deg_freedom2 is a decimal number, it is truncated to integers by MS Excel.
- #NUM! error – Occurs if either:
- The probability that is provided is less than or equal to 0 or greater than 1; or
- The arguments deg_freedom1 or deg_freedom2 is less than 1.
- #VALUE! error – Occurs when any of the arguments provided are non-numeric.
- The function was introduced in MS Excel 2010 and is available in subsequent versions.
- INV.RT seeks that value x such that F.DIST.RT(x, deg_freedom1, deg_freedom2) = probability. So, the precision of F.INV.RT depends on the precision of F.DIST.RT. F.INV.RT uses an iterative search technique. If the search fails to converge after 64 iterations, the function returns the #N/A error value.
Click here to download the sample Excel file
For more information on the function check out its documentation on Excel support website.
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