Average Formula

Average Formula (Table of Contents)

• Formula
• Examples
• Calculator

What is Average Formula?

The term “average” is one that mathematicians and statisticians frequently refer to as Mean. If someone wishes to get the central value from the available data, they can use the average function. Average plays a very essential role in statistics. In excel also we can easily find out the average or mean according to our needs. An average is a middle number in the data. We can say that an average is a single number selected to reflect the available list. Many researchers use averages when conducting research, but technical analysts use them most frequently since they must figure out the average price of the stock they are researching, making it more significant in their profession.

The formula for Average –

Examples of Average Formula (With Excel Template)

Let’s take an example to understand the calculation of the Average Formula in a better manner.

Average Formula – Example #1

Data of wages earned by labor in the last 4 weeks are as follow. Calculate the Average Wages earned by labor.

Solution:

Sum of all numbers is calculated as:

• Sum of all numbers = 200 + 300 + 400 + 700 + 450 + 3000
• Sum of all numbers = 2350 

An average is calculated using the formula given below

Average = Total Sum of All Numbers / Number of Item in the Set

• Average = 2350 / 6
• Average = 391.67

Average Formula – Example #2

Data is available for the month of sales of ice cream. From the available data, we need to calculate the Average sale of ice cream.

Solution:

The Sum of all numbers is calculated as:

• Sum of all numbers = 1200 + 1300 + 1500 + 1400 + 1250
• Sum of all numbers = 6650

An average is calculated using the formula given below

Average = Total Sum of All Numbers / Number of Items in the Set

• Average = 6650 / 5
• Average = 1330

Average Formula – Example #3

Raymond is a textile company and every year the company manufactures 100000 different types of cloth and sells them to the dealer. The company wants to know the average monthly sales. From the available data calculate the Average Sales.

Solution:

Sum of all numbers is calculated as:

• Sum of all numbers = 17000 + 14000 + 15000 + 25000 + 14500 + 14800 + 3800 + 4520
• Sum of all numbers = 108620

An average is calculated using the formula given below:

Average = Total Sum of All Numbers / Number of Items in the Set

• Average = 108620/ 8
• Average = 135778

Average Formula – Example #4

Voltas is in the business of manufacturing AC and they have a partnership with Youngster Company limited for selling their product. Every month they sell 25000 quantities to the dealer. So Voltas wants to know their total sales as they must pay commission to the dealer for selling their product. From the available data, we need to calculate the Average Sales of the company.

Solution:

The Sum of all numbers is calculated as:

• Sum of all numbers = 10000 + 12000 + 15000 + 9000 + 14520
• Sum of all numbers = 60520

An average is calculated using the formula given below

Average = Total Sum of All Numbers / Number of Items in the Set

• Average = 60520/ 5
• Average = 12104

Average sales for months is 12104.

Relevance and Uses of Average Formula

• Many companies and organizations use average to find out their average sales, average product manufacturing, average salary, and wages paid to labor and employees.
• WHO (World Health Organisation) also uses the average to know the yearly death and birth rate during a particular time.
• It is used by many agencies, basically to know the middle number or data in the available data.
• It is an important tool used by a Research company as it helps to know the average traded price of a particular stock.
• Average has relevance in each and every field and sector, especially in the stock market because it is used by analysts frequently.

Average Formula Calculator

You can use the following Average Calculator

Recommended Articles

This has been a guide to the Average formula. Here we discuss how to calculate Average along with practical examples. We have also provided the Average calculator with a downloadable excel template. You may also look at the following articles to learn more –

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