Get the Average of Values with Excel’s AVERAGE Formula

When working with Excel, numbers are everywhere: sales data, student grades, monthly expenses, employee performance, and more. But often, we’re not just interested in the raw values—we want to know the average. That one number that summarizes everything into a neat, easy-to-understand figure.

In this article, we’ll walk through how to calculate averages using Excel’s AVERAGE formula in Excel.

Key Takeaways:

• The AVERAGE function calculates the mean of a group of values quickly.
• It is faster and less error-prone than adding numbers and dividing manually.
• AVERAGE automatically ignores blank cells in your range.
• You can combine AVERAGE with other formulas like ROUND or IFERROR for cleaner results.
• AVERAGE is useful for both business analytics and personal tracking.

I explain how you can do this below:

Understanding the AVERAGE Formula

What Does the AVERAGE Formula Do?

The AVERAGE function in Excel calculates the arithmetic mean of a group of numbers. In plain English, that means it adds all the numbers you select and divides them by the count of those numbers.

What does it do?
Gives you the average of a group of values.

Formula breakdown:

=AVERAGE(number1, number2, …)

What it means:

=AVERAGE(the numbers you want to average)

Why Use AVERAGE Instead of Manual Calculation?

Yes, you could add everything up and divide manually, but here’s why AVERAGE is better:

• Less typing: Instead of writing long formulas like =SUM(D2:D10)/COUNT(D2:D10), you just write =AVERAGE(D2:D10).
• Error-proof: The more manual math you do, the more chances you have for mistakes.
• Handles dynamic data: If you add more numbers into your dataset, the AVERAGE formula automatically adjusts if you use a range.
• Cleaner spreadsheets: Shorter formulas = easier maintenance.

In short, AVERAGE saves time and makes your spreadsheets smarter.

 

How to Use the AVERAGE Formula in Excel

STEP 1: We need to enter the AVERAGE  function in a blank cell:

=AVERAGE(

STEP 2: The AVERAGE arguments:

text

What numbers do we want to get the average of?

Select the range of values:

=AVERAGE(D9:D12)

You have now calculated the average of the Sales numbers!

 

Advanced Tips with AVERAGE

Ignoring Blank Cells and Errors

One of the best things about AVERAGE is that it automatically ignores blank cells. That means you don’t need to clean your data every single time.

For example: If your data is: 10, 20, , 30, the formula =AVERAGE(A1:A4) will still return 20 (sum of values ÷ count of non-blank values). However, errors like #DIV/0! or text in cells can cause problems. In those cases, you can use AVERAGEIF or AVERAGEIFS to filter out unwanted values.

Example:

=AVERAGEIF(D4:D8,”>0″)

This will calculate the average only for values greater than zero.

Combining AVERAGE with Other Functions

You can supercharge your analysis by combining AVERAGE with other formulas:

With ROUND:

=ROUND(AVERAGE(D4:D8),2)

This gives you an average rounded to 2 decimal places.

With IFERROR:

=IFERROR(AVERAGE(D4:D8), “No Data”)

This prevents ugly error messages if the range is empty.

With SUM and COUNT (the manual way):

=SUM(D4:D8)/COUNT(D4:D8)

It does the same thing as AVERAGE, but it’s useful to know for troubleshooting.

 

Real-World Applications of AVERAGE

Business Scenarios

Businesses love averages because they simplify decision-making. Here are some examples:

• Sales Performance: Find the average sales per rep to set realistic targets.
• Inventory Management: Average monthly demand helps predict stock needs.
• Employee Evaluation: Average scores from multiple KPIs to measure performance fairly.
• Customer Feedback: Average survey ratings to get an overall satisfaction score.

Using AVERAGE ensures that decisions are based on representative figures, not one-off highs or lows.

Personal Use Cases

It’s not just for businesses—AVERAGE is just as powerful in personal life:

• Budgeting: Track your average monthly expenses.
• Fitness Tracking: Calculate your average steps per day.
• Education: Get your average test score across subjects.
• Travel Planning: Find the average cost of flights to choose the most economical route.

Basically, if numbers are involved, AVERAGE is your friend.

 

FAQs

Q1. What is the difference between AVERAGE and SUM/COUNT in Excel?

The AVERAGE function is essentially a shortcut for =SUM(range)/COUNT(range). Instead of writing two formulas and dividing them, Excel bundles the process into one clean function. This makes your worksheet simpler, easier to maintain, and less prone to errors. Both approaches give the same result, but AVERAGE is quicker and clearer. In practice, it’s better to use AVERAGE unless you need SUM and COUNT separately.

Q2. Does AVERAGE include blank cells in the calculation?

No, AVERAGE automatically ignores blank cells in a range. This is extremely helpful because you don’t need to clean up every empty row or column before calculating. For example, =AVERAGE(A1:A5) with values 10, 20, , 30 will still return 20. However, errors like #DIV/0! or text in cells may disrupt the formula. In those cases, AVERAGEIF or IFERROR can be used for more control.

Q3. Can I average only certain numbers, like values above zero?

Yes, Excel allows conditional averaging with AVERAGEIF and AVERAGEIFS. For example, =AVERAGEIF(B2:B10,”>0″) will calculate the average of only positive values. This is useful when filtering out invalid or irrelevant data, like negative sales or placeholder entries. AVERAGEIFS goes even further by letting you apply multiple conditions at once. These functions give you more precise results when working with complex datasets.

Q4. What happens if my dataset contains text or errors?

Text entries are ignored by the AVERAGE function, but errors like #N/A or #DIV/0! can break the formula. To handle this, you can wrap your AVERAGE function with IFERROR, like =IFERROR(AVERAGE(B2:B10),”No Data”). This way, instead of returning an error, Excel will display your chosen message. Another option is using AVERAGEIF to exclude problematic values based on conditions. Cleaning your dataset and applying these functions ensures smoother calculations.

Q5. Where can I use AVERAGE in real life?

AVERAGE is practical in both professional and personal settings. Businesses use it to measure sales performance, employee KPIs, or customer satisfaction scores. At home, you might track your average monthly expenses, exam scores, or even daily step counts. Travelers can use it to estimate average airfare or accommodation costs. Anytime you want one number to represent a group of values, AVERAGE is the go-to tool.