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How to Calculate the Altman Z Score in Excel

July 29, 2025

by howtoexcel investing stocks Uncategorized

The Altman Z Score is a financial formula that evaluates a company’s financial health by analyzing key balance sheet and income statement ratios. In simple terms, it produces a single number (“Z-score”) that helps predict the probability that a company will go bankrupt.

A low Z-score can alert you that a company is at high risk of insolvency before obvious signs of distress appear. Since it relies on objective financial data, the Z-score offers an unbiased measure of a company’s stability.

What are the five key ratios in the Altman Z Score Formula?

The Altman Z Score is calculated from five financial ratios, each capturing a different aspect of a firm’s financial health:

A: Working Capital / Total Assets: This measures liquidity by comparing net working capital (current assets minus current liabilities) to total assets. It indicates the company’s short-term financial stability and ability to cover its short-term obligations. A higher ratio means the firm has more liquid assets relative to its size, which is a positive sign.
B: Retained Earnings / Total Assets: This profitability ratio shows the cumulative profits that a company has retained (not paid out as dividends) relative to its total assets. It reflects the company’s long-term earning power and age – older, profitable firms will have large retained earnings.
C: EBIT / Total Assets: EBIT stands for Earnings Before Interest and Taxes, essentially the operating profit. This ratio measures operating efficiency – how effectively the company’s assets generate earnings. Higher values mean the company’s core business operations are very profitable relative to its asset base.
D: Market Value of Equity / Total Liabilities: This leverage ratio compares the company’s market capitalization (market value of all shares) to its total liabilities. It introduces a market perspective on leverage. A larger value suggests investors value the company’s equity highly relative to its debts, implying more of a buffer to absorb losses.
E: Sales / Total Assets: This is an asset turnover ratio indicating how efficiently the company generates revenue from its assets. It varies by industry, but generally a higher Sales/Assets ratio means the company is using assets effectively to drive sales.

Each of these five ratios captures one dimension of financial performance – liquidity, retained profitability, operating performance, market leverage, and asset productivity respectively. Altman’s insight was that a weighted combination of these ratios could reliably distinguish healthy firms from those likely to fail.

What the different Z-score values mean

Once you calculate a company’s Z-score, it falls into one of three risk categories (zones) originally defined by Altman:

Z > 2.99 – “Safe” Zone: A score above 2.99 is considered safe. The company is likely in solid financial health and at low risk of bankruptcy in the near term. Investors can take comfort if a firm’s Z-score is around 3 or higher – it suggests the business is financially stable.
1.81 <= Z <= 2.99 – “Grey” Zone: A score between 1.81 and 2.99 falls into a grey zone. This is an ambiguous middle range indicating some moderate risk. The company isn’t obviously about to fail, but there are enough warning signs that it’s not completely safe either. Investors should be cautious and perhaps investigate further – the firm could go either way over time.
Z < 1.81 – “Distress” Zone: A score below 1.81 signals the company is in distress and has a high risk of bankruptcy. In Altman’s study, companies with Z < 1.81 often did go bankrupt within a couple of years. Such a low score is a glaring red flag for investors to be extremely careful – it suggests the company’s financial foundations are very weak.

Setting up the Altman Z Score Calculation in Excel

To calculate the Altman Z Score in Excel, we can set up some inputs to make it easy to enter data. And from there, formulas can be setup to take care of the remaining calculations. We’ll need inputs for the balance sheet, income statement, along with the current share price. Here’s a look at what the inputs look like on my sheet:

Inputs for the Altman Z-score calculation in Excel.

The point of these inputs is for the user to easily plug in values from the income statement and balance sheet, without having to worry about setting up the formulas. Those will be done on the following cells:

Calculated cells on the altman z-score template in Excel.

For item A, the working capital balance will be calculated by taking the current assets and deducting the current liabilities, and then taking that result and dividing it by the total assets.

For item D, we need to multiply the shares outstanding by the stock price to get the market value of the equity, and then dividing that by total liabilities.

For all other items, the calculations should be self explanatory as they are referencing different values from the input cells.

There is also a weighting that gets applied (multiplied) to the cells, and this lookup table can also be setup on the worksheet:

Weighting for the Altman z-score in Excel.

The Altman Z Score weighting is designed primarily for manufacturing companies but there are other variations. And by setting a place where you can change the weighting, you can easily customize the weighting should you need to.

Let’s also setup a lookup table for the different thresholds. If the Z-score is below 1.81, for instance, then the business is in distress. If it’s 3.00 or more, then it’s considered safe. Anything else falls into the Grey zone. The following lookup table will enable us to do a lookup to determine which zone a company falls within:

The above table can be used with a VLOOKUP function and by setting it up for approximate matches (rather than exact ones), it will ensure the correct classification is applied based on the Z-score value.

Now, to pull it all together, what we need to do is to calculate the Z-score. And this can be done by tallying up the calculated fields. And next to the output, I’ll setup a VLOOKUP formula to determine which classification it falls under: distress, grey, or safe.

Altman Z-score calculation and lookup value in Excel.

Now, let’s try it out by entering the following values for a manufacturing company, Caterpillar. These values are pulled from Yahoo Finance for 2024:

Based on my Excel spreadsheet, this produces the following values and related Z-Score:

I’ve added conditional formatting to help highlight the cell based on its value and the category that it falls in. You can download the template that I’ve created here if you want to compare your formulas to mine, or if you just want one that is ready to use.

If you liked this post on How to Calculate the Altman Z Score in Excel, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.

How to Analyze S&P 500 Sector Performance Using an Excel Bar Chart

June 10, 2025

by howtoexcel charts investing stocks

Charts can be an effective way to convey data, as opposed to just tables. By visualizing numbers, readers can easily see the highs and lows, and just how much of a variance exists between them. In this example, I’m going to show you how to turn a table summarizing S&P 500 sector performance into a chart.

The data we’re going to use for this example is as follows:

Let’s turn this into a more helpful visual, which will sort these values from highest to lowest. Here are the steps you can take to do that:

1. Sort the list from largest to smallest

This can be done by simply selecting the 2024 return header and clicking on the sort descending button. The table is now re-arranged as follows:

S&P 500 sector performance for 2024, sorted by returns in descending order.

2. Create a column chart

By selecting the data and choosing to create a column chart, you can create a visual that now displays the returns, from highest to lowest.

A column chart showing S&P 500 sector returns.

3. Select a chart style

If you select the chart and click on the Chart Design tab, there will be many different styles to choose from. This can save you the time from making multiple adjustments yourself.

Let’s select the dark one on the bottom-left corner.

4. Remove gaps

To make the column chart more snug, you can remove the gaps between them. To do this, right-click on the chart and select Format Data Series. Adjust the Gap Width to 0%.

5. Remove axis labels

Since we’re going to incorporate the labels into the actual chart, you can remove the axis labels themselves. To do this, simply click on each axis and click on the delete key. You’ll now have a chart that looks like this:

A column chart with no gaps or axis labels.

6. Setup the color formatting for the column charts

To help display the largest and worst-performing sectors, let’s apply different colors to each column. Starting with the first column chart, set that to a dark green color and apply a black border around it. Then, proceed to the next one, by clicking on ctrl + right arrow. This avoids having to manually select each item. If you need to go back in the opposite direction, you can use ctrl + left arrow.

Here’s how I’ve setup my chart so it gradually goes from a dark green to a lighter green, to light red, and dark red.

A column chart in Excel showing different colors.

7. Add labels

If you right-click on any of the columns, there will be an option to Add Data Labels. Once added, you can also right-click on them to select Format Data Labels. Let’s select the option to show the value along with the category name, and set the label position to Center.

What we can also do is setup a data label shape, so that it’s easy to see. To do this, right-click on any of the labels and select Change Data Label Shapes. Let’s choose a rounded rectangle.

Next, on the alignment section, let’s also set the text direction to rotate all text 270 degrees.

Setting the text direction for a data label.

This now results in the following chart:

Chart showing S&P 500 returns by sector.

8. Add a title

The last step is simply to update the title, to more accurately reflect the data. Let’s rename it by double-clicking on the title, and setting the name to ‘Sector returns in 2024’

Chart showing sector returns for 2024 with an updated title.

If you liked this post on How to Analyze S&P 500 Sector Performance Using an Excel Bar Chart, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.

2025 Stock Trading Template

February 26, 2025

by howtoexcel free free template investing stocks

If you want to track your investments and stay on top stocks in a watchlist, I’ve created a template which will make that easy to do. My 2025 Stock Trading Template is a free template in Google Sheets that you can use for that purpose. It will give you a place to enter trades, populate a watchlist, and visually see how your investments are doing on a dashboard. Below, I’ll go over how the template works and how you can access it.

Entering in stock trades on the template

The template contains an Activity tab where you can enter any buy and sell transactions. You can also specify cash-only transactions if you make a deposit or withdrawal. It’s also possible to enter both a trade and a cash transaction on the same line.

In the screenshot below, you’ll see a cash-only transaction on the first row, and the one below has a stock purchase along with cash deposit amount. Any withdrawals should be entered as negative values in column D. This is for the purpose of tracking both the value of your investments and cash in your portfolio.

Activity tab on the 2025 stock trading template in Google Sheets.

You’ll want to reconcile your cash balance in the last column to ensure that it is properly accounted for. The current value of your holdings will pull into Google Sheets using the most recent stock prices; there’s no need to update the current price.

The only columns you need to populate in this table are A:G. The others will calculate automatically.

Keeping track of a watchlist

If you want to also track certain stocks, you can do so using the Watchlist tab. Simply enter the ticker symbol in column A and the value in column B will populate, which shows the stock’s percent change for the most recent trading day.

You only need to enter data in column A. The rest of the values will populate on their own and display on the summary tab.

List of stocks to watch on the 2025 stock trading template in Google Sheets.

View your holdings and watchlist on the summary tab

Once you’ve entered your holdings and the stocks you want to track, you can head over to the Summary tab which will summarize your financial position. Here you’ll see the current value of your investments, your gains and losses, and your return over the trailing 12 months (TTM) as well as how stocks have been performing in individual months.

Below the headers, in row 4, you’ll also see your watchlist, sorted in order of highest to lowest returns for that day. It will cut off after 300 characters so you may not see all of them on there if you have a large watchlist.

2025 stock trading template showing the dashboard in Google Sheets.

Download the template

You can access the Google Sheets template in the link below, which will prompt you to make a copy of it. I have entered some sample data for you to see how it works, and you can overwrite it with your own entries.

2025 Stock Trading Template

If you have any feedback, comments, or suggestions for improvement on the template, please feel free to contact me and let me know.

If you like the 2025 Stock Trading Template, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.

How to Create a Stock Heat Map in Google Sheets

January 14, 2025

by howtoexcel google sheets investing stocks

Heat maps can help you easily identify high and low values. You’ll often find them to display stock prices to show which stocks did well, and which ones didn’t. They can also make it easy to see whether it was a good or bad day on the markets when looking at a list of stocks. In this post, I’ll show you how to create a heat map in Google Sheets to do this.

Step 1: Populating your list of stocks

To start with, I’m going to need a list of stocks to track. I’m going to use the top 20 most valuable stocks as of today’s date and put them into a list:

List of the 20 most valuable stocks in Google Sheets.

Step 2: Calculate the percentage change

Next, I’ll need to setup the percentage change. This can be either the percent change from the previous day, or I could calculate how a stock has done over a specific timeframe, such as a 12-month period. In Google Sheets, you can use the GOOGLEFINANACE function to track the percent change from the previous day. Here’s what that formula would look like, assuming I want to calculate this for the ticker symbol in cell A2:

=GOOGLEFINANCE(A2,”changepct”)

This will return a value to display the percent change.

I’m going to use a more complicated example, however, to show how the stock has performed over the past year. First, I’ll pull in the current stock price, using the following formula:

=GOOGLEFINANCE(A2,”price”)

The trickier part is to pull in the price from a year ago. To go back 365 days, I can set the start date equal to today’s date minus 365 days:

=GOOGLEFINANCE(A2,”price”,TODAY()-365)

The problem is that this returns a table, occupying two rows and columns:

To ensure I’m just pulling in the closing price, I’ll use the INDEX function to grab the value from the second row and second column:

=INDEX(GOOGLEFINANCE(A2,”price”,TODAY()-365),2,2)

Now, to calculate the percent change, I will take the current price and divide it by the historical price:

=GOOGLEFINANCE(A2,”price”)/INDEX(GOOGLEFINANCE(A2,”price”,TODAY()-365),2,2)-1

I add the -1 at the end to get just the percent change. Now, if I format my values in percentages, I can see how the stocks have performed over the past 12 months:

Google sheets chart showing stock performance.

Step 3: Ranking the values

Using the RANK function in Google Sheets, I can easily determine which stocks were the best and worst performers in the range. The following formula just takes the percentage value in column B and compares it against all the values in that column:

=RANK(B2,B:B)

By copying this formula down, I can now see a ranking of all the values:

Google sheets showing stock performance and ranking.

Step 4: Populate the stocks in order of their performances

Now that the data is setup, I can start arranging the values in order of largest to smallest. To do this, I’m going to use the INDEX function along with the MATCH function to extract the stocks based on their performances. Here is what the first formula will be:

=INDEX($A:$A,MATCH(COLUMN(A1),$C:$C,FALSE),1)

I use the COLUMN function because what I am going to do is drag this formula to the right, so that my largest values go from left to right. And as I copy the formula, A1 will become B1, then C1, and so on. The purpose of this is to increment the function to get the next value. Here is what my table looks like for the first five values:

Top-performing stocks listed in Google Sheets.

These were the five best-performing stocks that were in my list. Below these values, I’m going to also pull in the percentages. This is accomplished through the following formula:

=INDEX($B:$B,MATCH(COLUMN(A1),$C:$C,FALSE),1)

Now I have a list of the top ticker symbols and their percentage gains:

Top-performing stocks listed in Google Sheets along with their changes in value from a year ago.

Step 5: Creating conditional formatting rules

I have the values setup and next I’ll need to create conditional formatting rules to display different colors based on their relative performances. I’ll use a bright green for the best performance, and gradually show a white color when the values are close to zero, and red when they are negative.

I’m going to setup a table which shows the different thresholds I want to track, so it’s easy to change these conditional formatting rules right on the spreadsheet:

Table of conditional formatting thresholds in Google Sheets.

This is my table of values in column K. To setup the rules, I’m going to select the ticker symbols which I ranked in step 4, and create the following conditional formatting rule to start with:

Setting up a conditional formatting rule in Google Sheets.

I’m going to repeat these steps for the values in K2, K3, K4, and K5. I’ll adjust the colors to differentiate between the colors ranges I specified earlier. I use the same formula but simply adjust the cell I’m comparing to:

One thing to note here is that the value I’m using as my comparison is in row two, which is where my percentages are. This means for the conditional formatting rules in the first row, Google Sheets is looking the row below, which contains the percentages.

I’ll need to create another set of conditional formatting rules for the actual percentages themselves in row two. In order to avoid disrupting the formulas and the logic for the first row, I’ll need to create these rules from scratch again. It’s important not to just copy the formatting rules as Google Sheets will end up misinterpreting what I want it to do.

After selecting the values in E2:I2, I create the same conditional formatting rules. The one key difference is that this time I’m referencing the values in row two, not the row below. Once that’s setup, you should now see the same conditional formatting rules applied to both rows:

Heat map conditional formatting rules setup in Google Sheets for multiple stocks.

Step 6: Create borders and setup additional formatting

Before I copy over the formulas and conditional formatting to more rows, I’m going to setup additional formatting and borders. I’m going to make the ticker font larger and bold. And I’ll also outline a border for each stock and its percent change. Here’s what my tickers look like after making these changes:

Step 7: Copying the formatting rules and formulas to accommodate more stocks

I created a row of top 5 stocks but I’m going to expand this so that I have four rows of five stocks each, so that I’m capturing all 20 stocks in my list. To do this, I’m going to copy the cells in E1:I2 multiple times:

Heat map conditional formatting rules setup in Google Sheets for 20 stocks.

I’ve copied the formulas but I need to adjust them so that they aren’t all starting from the top-ranking stock all over again. Here’s how I’m going to adjust this. For the formulas in cells E3:E4, I’m going to add five so that they start at the sixth value. This is the updated formula in E3:

=INDEX($A:$A,MATCH(COLUMN(A3)+5,$C:$C,FALSE),1)

Now I’m going to do the same thing for cell E4. Once I’m done, I’ll copy the formulas across and now my second row is updated to show the stocks in the 6th, 7th, 8th, 9th, and 10th positions:

Heat map conditional formatting rules setup in Google Sheets for 10 stocks.

For the next row, I’ll add 10 to the formulas in column E. Then copy those across. Repeat the same process for the next set of rows and add 15, and do the same. Here’s what my updated table looks like:

Now my heat map is setup to show the percent changes. But as you can see, there’s not a lot of variability here. I’m going to change my values in column K as follows: 100%, 60%, 30%, 20%, -100%. I always leave the last one to -100% to ensure it captures everything else. With the updated rules, now my heat map looks as follows:

Heat map conditional formatting rules setup in Google Sheets for 20 stocks, showing red highlights for the poorest-performing stocks.

Although the values in red are not negative, based on the rules I’ve set out, it highlights the lowest-performing stocks in this list as red, and thus, the sheet follows the rules correctly. You can expand this to include more stocks or to track daily changes or other values.

If you like this post on How to Create a Stock Heat Map in Google Sheets, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.

Calculate Trailing 12 Month (TTM) Values in Excel

November 26, 2024

by howtoexcel financial analysis investing Uncategorized

Calculating trailing-12 month values, also known as TTM, can be a powerful way to analyze financial or business data over the most recent year. This method focuses on the latest 12-month period, providing a rolling snapshot of performance or trends. Unlike calendar-based analysis, which adheres strictly to yearly or quarterly periods, TTM values are dynamic and update with each new data point. This makes them ideal for ongoing monitoring, where understanding recent trends is more relevant than sticking to predefined reporting periods.

The concept of a TTM value is straightforward: it involves summing, averaging, or otherwise aggregating data from the most recent 12 months. For instance, if you’re tracking monthly revenue, a TTM sum would include the total revenue for the latest 12 months, updating automatically as new months’ data becomes available. This ensures that you’re always working with the most current information, offering a more flexible and actionable view of performance.

Why Are 12-Month Trailing Values Useful?

Calculating TTM values is valuable in contexts where trends or seasonality play a significant role. For example, retail businesses may experience seasonal spikes during the holiday season, while other industries might have cyclical patterns tied to the economy. A TTM analysis smooths out these seasonal fluctuations, offering a clearer picture of overall performance without being skewed by short-term anomalies.

For investors, financial analysts, and business owners, this calculation can be a crucial metric. It helps in understanding key financial ratios (including price-to-earnings ratios), by providing a consistent timeframe for comparison. It also allows for benchmarking against competitors or industry averages, as trailing metrics are widely used in reporting and valuation. Moreover, it can aid in spotting trends early, such as declining sales or increasing costs, enabling proactive decision-making.

Calculating TTM Values in Excel

In the following example, I have sales data by quarter. Since they are quarters, I only need to pull the last four values to get the last 12 months worth of values.

In the simplest approach, you can just use the SUM function and grab the last four values from the top:

Using the SUM function in Excel to calculate trailing-12 month sales values.

By not freezing any cells and copying the formula down, it will automatically adjust so that it’s always getting the most recent four values.

You can make the formula more dynamic by using the OFFSET function. You can change the number of values you want to add up. And it can be useful if your data is at the bottom, and you want to start from the last value you input. Here’s how you can use a variable to determine how many trailing values you want to calculate.

Using a variable along with the OFFSET function to calculate TTM values in Excel.

Using the OFFSET function, you can specify the height and width of the range. In the above example, I’m using cell F1 to specify the number of periods I want to sum up.

If your most recent values are at the bottom of your range, the OFFSET function can help you with this as well. Here’s how the formula would look like:

=SUM(OFFSET(B2,COUNTA(B:B)-2,0,-4,1))

B2 is the starting reference point.

The COUNTA function counts the number of nonblank cells in column B. It is reduced by 2 since the reference point, B2, is in row 2. It needs to be reduced by 2 to get back to 0.

There are 0 columns to offset, hence the next argument is 0.

The -4 tells the formula that you want to go back 4 rows.

The 1 at the end tells the formula that it is just 1 column wide.

This produces an array, which is then summed up through the SUM function.

If you like this post on How to Calculate Trailing 12 Month (TTM) Values in Excel, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.

How to Track Hundreds of Stocks in Google Sheets

May 28, 2024

by howtoexcel google sheets investing stocks

Google Sheets makes it easy to pull in data from the internet, including stock prices. An advantage it has over Excel’s StockHistory function is that it can pull prices even before the trading day has finished. This gives users access to more up-to-date information. Plus, it’s easy to track not just one or two stock prices in Google Sheets but even hundreds.

How to pull in a stock price for a ticker symbol in Google Sheets

Using the GOOGLEFINANCE function, you can quickly pull in a stock price easily. Here are the main components of the function:

Ticker
Attribute. Below are the attributes you can use for stocks:
- “price”: current price, up to 20 minutes delayed.
- “priceopen”: the opening price.
- “high”: the current day high.
- “low”: the current day low.
- “volume”: the current day’s volume.
- “marketcap”: the stock’s current market cap.
- “tradetime”: the time the last trade was made.
- “datadelay”: how delayed the real-time data is.
- “volumeavg”: the stock’s average trading volume.
- “pe”: the price-to-earnings ratio.
- “eps”: the most recent earnings per share.
- “high52”: the stock’s 52-week high.
- “low52′: the stock’s 52-week low.
- “change”: the change in stock price from the previous day’s close.
- “changepct”: the percentage change in price from the previous day’s close.
- “beta”: the stock’s beta value.
- “closeyest”: the previous day’s closing price.
- “shares”: the number of shares outstanding.
- “currency”: the stock’s currency
Start Date
End Date
Interval

You don’t, however, need to fill in all of the arguments. For example, the following formula only uses the ticker and the attribute field and it will pull in Amazon’s current stock price:

=GOOGLEFINANCE(“AMZN”,”price”)

If you want to pull in Amazon’s stock price for the first trading day of the year, you could use the following formula:

=GOOGLEFINANCE(“AMZN”,”price”,”1/1/2024″)

This will return the following table:

Although January 1 was not a trading day, the formula automatically gets the data for the next trading day. If you just want to get the closing price and don’t want the rest of the table, you can nest this formula within the INDEX function as follows:

=INDEX(GOOGLEFINANCE(“AMZN”,”price”,”1/1/2024″),2,2)

Since we are getting the second column and the second row, it will only retrieve the closing price for that day. This method works when you are just pulling in the stock price for a single date.

Adding a prefix for exchanges

If you want to track a lot of stocks, the one thing you may inevitably run into is a situation where Google Sheets doesn’t correctly identify your stock ticker. If, for example, you want to pull in a stock from a different exchange, entering just the ticker symbol alone won’t be enough. If I wanted to pull in the price for Air Canada stock, which has a ticker symbol AC on the Toronto Stock Exchange (TSX), this formula won’t work:

=GOOGLEFINANCE(“AC”,”price”)

Instead, that formula will return the value for Associated Capital Group, which trades on the NYSE. Google Sheets effectively takes its best guess as to which ticker you want to pull in. But as you can imagine, it may get it wrong if you have a symbol which is active on multiple exchanges.

To get around this, you can incorporate an indicator for the exchange. For the TSX, it’s TSE. If you’re not sure which one to use, go to the Google Finance website and look for the stock you want, and take note of the code for the exchange:

Google Finance quote showing the stock ticker and the exchange code.

To ensure the GOOGLEFINANCE function is retrieving the correct stock, I can adjust my formula as follows:

=GOOGLEFINANCE(“TSE:AC”,”price”)

You can follow the same methodology for other stocks and exchanges.

Creating a template to track hundreds of stocks

To create a template to help you track stocks in Google Sheets, all you really need are a few fields. One for the ticker, one for the exchange, plus one for the stock price. I’ll also add one for the % change. This can help you build out a dashboard.

If I have my tickers in column A and the exchange code in column B, I can combine the values to create a dynamic formula which will update based on those combinations. This way, I can avoid having to hardcode the individual stock tickers. Here’s how that formula would look:

=GOOGLEFINANCE(B2&”:”&A2,”price”)

The key is to combine those values and separate them with a colon in-between, so that the format is exchange:ticker. Now, when I create my template, I can copy that formula down and it will pull in stock prices which aren’t based solely on just the stock ticker:

Stock prices in Google Sheets based on multiple tickers.

Let’s extend this a bit further and now also include the percent change from the previous day. If I want to format it as a percentage, I need to make sure I divide the value by 100:

=GOOGLEFINANCE(B2&”:”&A2,”changepct”)/100

And now I can display both the stock price and the percent change from the previous day:

Stock prices in Google Sheets based on multiple tickers showing the price and the percent change.

You can copy these formulas down hundreds of rows, making it possible to track as many stocks as you need in Google Sheets.

If you like this post on How to Track Hundreds of Stocks in Google Sheets, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.

How to Download Financial Statements Into Excel and Google Sheets

April 23, 2024

by howtoexcel add-ins investing stocks

In a previous post, I went over how to download a company’s financial statements from the Wall Street Journal’s website. However, that connection appears to now be closed. One of the risks when using Power Query to download data from a website that the connection will always be there. But there is another way to get financial statement data, and it can allow you to download much more than what was available through the Wall Street Journal.

You’ll need to setup an account with Alpha Vantage

The website that you can use is Alpha Vantage. It provides API access which you can use to download financial data. There is a free account but there is a limit to the number of requests you can make every day — up to 25. But with the wealth of information you can get with just a single query, there’s a lot of data you can accumulate.

Once you sign up for an account with Alpha Vantage, you’ll have an API key that you can use to connect to its database. You’ll need to save that key to download the data.

Use the site’s custom Excel add-in

Once you have the API key, you can start downloading data. But rather than creating your own template or even using Power Query, what you can do is download the sample Excel files that are available on the site on the spreadsheets page. Here you can select to download the Office 365 add-on, which also includes sample Excel files that can get you started in seconds.

There is a template called FundamentalData.xlsx which contains a file that’s ready to go to import the financials. When you first open it, you’ll need to select the AlphaVantage(Web) tab and click on the Open Taskpane command.

From there, you’ll see an option to input your API Key.

Then, on the filings tab, you’ll see an area where you can specify the ticker symbol you want, the type of filing (cash flow, income statement, or balance sheet) and the reporting frequency (quarterly versus annual). Then, as you make your selections, the data on your spreadsheet will update with various financial metrics.

Downloading financial statement data in Excel.

Using Alpha Vantage is one of the better options for investors today who want to download financial data into Excel.

Importing financial statement data in Google Sheets

The company also has a Google Sheets add-on available from the Google Workspace Marketplace, just go to Extensions ->Add-ons -> Get add-ons. Then search for ‘Alpha Vantage’ and download the add-on:

The Alpha Vantage add-on in Google Sheets.

Once installed, go back to the Extensions menu, select Alpha Vantage Market Data and select Enter API Key, where you can paste your API key into. Once that’s done, you can use formulas to pull in financials. The following pulls in the quarterly income statement data for MSFT stock:

=AVGetCompanyFilings(“MSFT”,”IncomeStatement”,”Quarterly”)

For a full breakdown of what you can download on Google Sheets, refer to the documentation on the Alpha Vantage website.

Download the data using Power Query

If you prefer not to install an add-in, then you can still download the data from Alpha Vantage using Power Query. You can refer to the documentation for the various links to pull financial data. For the income statement, for example, this is the following url:

https://www.alphavantage.co/query?function=INCOME_STATEMENT&symbol=TICKER&apikey=DEMO

Where Ticker is the stock symbol and Demo is your API Key. To generate the data in Power Query, use the Get Data option and select From Web and paste the URL into there:

Using Power Query to download financial statement data.

Then, once Power Query is loaded up you have the option to specify whether you want the list for the annual reports or the quarterly reports.

Selecting the type of financial report to download from Power Query.

If I select the quarterlyReports list, I’ll have another list of records. I can expand this by clicking on the Convert To Table button in Power Query:

Converting a list of records in Power Query into table.

This will put everything back into a single column. This time, however, I can expand all the fields out by clicking the two arrows going in opposing directions.

Expanding a column in Power Query to list all the fields.

Now my data looks complete:

Income statement data loaded in Power Query.

And this is what it looks like once it’s loaded back into Excel:

Income statement data loaded into Excel.

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What Is the Difference Between a Moving Average and an Exponential Moving Average

March 5, 2024

by howtoexcel average investing stocks

Moving averages can be useful in data analysis, when looking at trends both in finance and in the stock market. You can look at 30, 60, 90 day trends, and even longer or shorter durations. There’s also a difference between whether you are looking at a simple moving average and an exponential moving average. In this article, I’ll go over the differences between the two, and show you how you can calculate them in Excel.

How to Calculate a Moving Average (MA) in Excel

A moving average is a simple tool used by investors and traders to smooth out price data over a specified period. It is called “moving” because it is continually recalculated based on the latest data, providing a dynamic view of an asset’s average price over time. The advantage of an MA is its simplicity as it can easily be calculated.

A moving average is calculated by simply taking the average of the trailing periods. In the case of a 60-day MA, you would look at the average over the past 60 days. If it’s a 90-day MA, then you average the past 90 days. In the following example, I have the price of Bitcoin over the past few years. Ideally, when setting up moving averages, you want your dates in ascending order, going from oldest to newest.

Price of Bitcoin in an Excel spreadsheet.

Here are the steps to calculate the moving average:

Determine the number of periods you want to go back. For 5 days, it will be 5, for 10 days it will be 10, and so on.
Calculate the average in the adjacent column. Make sure you do not freeze cells.
Copy the formula down so that the average moves (hence why you do not want to freeze cells).

Here is what the values look like, along with the formula for each cell:

20-day moving average of Bitcoin in an Excel spreadsheet.

The average is continuously moving with each cell, but it always contains a range of 20 values since the 20-day MA contains 20 days. Oftentimes, people using multiple moving averages as a way to identify crossovers, such as when stocks cross 20-day MAs and 50-day MAs. Depending on the direction of the crossover, it can be a very bullish indicator (20-day MA crosses from underneath) or a very bearish indicator (20-day MA crosses from above). This is what those moving averages look like for Bitcoin and how they appear on a chart:

A bullish crossover involving Bitcoin's 20-day moving average and its 50-day moving average.

In this example, the 20-day MA made a bullish crossover recently, going higher than the 50-day MA. This is a very bullish trend. However, with simple moving averages, these trends can take a while to develop, and that is one of the drawbacks of using them — they are slower to react to recent price movements.

How to Calculate an Exponential Moving Average (EMA) in Excel

The exponential moving average (EMA) gives more weight to recent prices, making it more responsive to new information, and thus, there’s less of a lag effect; changes and crossovers can occur much more rapidly. This characteristic makes the EMA a preferred choice for many traders, especially those looking to capitalize on short-term trends.

Here’s how to calculate an exponential moving average in Excel:

Determine the number of periods, as you did with the simple moving average.
Calculate a multiplier, using the formula 2 / (period +1). In the case of a 20-day MA, the multiplier would be 0.095, which is 2/(20+1).
Calculate the moving average for the first period. The very first period needs to be a simple moving average.
For every value afterwards, you’ll use the following formula: =Multiplier x (Current Price – Previous EMA) + Previous EMA.

Here’s how this would be calculated with the price of Bitcoin, as in the previous example:

Calculating Bitcoin's exponential moving average in Excel.

After the initial moving average, the subsequent averages are calculated using the weighting. Here’s a side-by-side comparison of how the 50-day EMA compares with the 50-day MA. I’m using 50-day averages here since they are normally slower to see movements in. But by using an EMA, that can help expedite trends.

Comparing Bitcoin's 50-day exponential moving average against its 50-day simple moving average.

The 50-day EMA makes quicker, more rapid movements and is changing more frequently while the 50-day MA is smoother and more gradual in its changes. With Bitcoin’s price rising rapidly in recent weeks, that uptrend is observed more immediately with the EMA than with the simple MA.

Which Should You Use: MA or EMA?

While both MAs and EMAs provide valuable insights into market trends, the choice between them depends on the specific needs of the trader or analyst. MAs are best suited for identifying long-term trends, as they smooth out price fluctuations evenly. In contrast, EMAs are ideal for those looking to react quickly to recent price changes due to their emphasis on newer data.

By understanding the differences between these two types of averages and knowing how to calculate them in Excel, investors and analysts can better tailor their strategies to suit their goals. Whether it’s the simplicity and broad trend identification of the MA or the responsiveness of the EMA to new information, both tools can be useful.

If you liked this post on What Is the Difference Between a Moving Average and an Exponential Moving Average, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow us on Twitter and YouTube.

2024 Stock Trading Template

February 27, 2024

by howtoexcel investing stocks template

Do you buy stocks? Help track your transactions and your returns with this stock trading template. This is an update over the previous stock trading template, offering more reports and analysis, and the ability to more easily track your portfolio’s performance. In this post, I’ll go over how the template works, and how to use it.

Using the stock trading template for the first time

When you first use the 2024 stock trading template, there are a few items you may wish to modify on the Settings tab. These are the end date (by default set to today) and the short-term trading days cutoff. The end date is used because the reporting tab looks at the trailing 12 months. So if you want a cutoff as of Dec. 31, 2023 and see the full year, you can modify the cutoff there. But if you want to look at your returns up until today, you can leave that as is, up to today’s date.

The short-term trading days cutoff is used for a report which pulls your gains and losses over this number of days. If you’re a very active trader, you my want to lessen this interval to 30 days or less. If, however, you don’t trade that often, you may prefer a longer cutoff. The default is set to 60.

Enter transactions in the file

To make the data-entry process simple, there is a userform which will allow you to enter your buy and sell transactions. You can also enter starting balances and dividend payments. You can access the form from the Trading Journal section on the Home tab, right within the Excel ribbon.

The trading journal buttons for the stock trading template.

By clicking the Enter Transaction button, you will see the following form pop up:

The userform to enter transactions in the stock trading template.

To start, you can use the Date Picker button to select the transaction date. With the date picker, you can use the button on the left and right side to move one month at a time. You can also select the month from the drop-down list. You can change the year by just typing in the year of the transaction. Once you have the right date and month, use the tab key so that the calendar updates. Then, click on the date the transaction relates to.

The date picker userform in the stock trading template.

Next, select the action type. This will determine which fields you need to enter. There are multiple options to choose from.

Selecting a transaction type for the stock trading template.

If you are buying a new stock you don’t already own, select Open New Position.
If you already own a stock and are adding more shares, select Add to Existing Position.
If you are selling shares of a stock you own, select Sell Shares.
If you are adding cash to your portfolio, select Enter Contribution.
If you are withdrawing cash from your portfolio, select Enter Withdrawal.
If you are recording dividend payments, please select Enter Dividends.
If you are already own stocks and need to enter in your initial positions, select Starting Balance. For starting cash positions, use the Enter Contribution option.

You will then see a different form based on your selection, showing you which fields you need to enter.

Using different investing strategies

By default, there are three investing strategies you can select from when buying a stock: Buy and Hold, Contrarian, and Speculative. This can be helpful if you want to track how your different strategies work. If you don’t use different strategies, you can just leave everything as Buy and Hold. If, however, you want to add or modify strategies, click on the Update Strategies button when entering a new position:

Selecting a strategy on the stock trading template.

That will then populate a new userform where you can manage the different strategies.

Modifying strategies on the stock trading template.

How the template tracks transactions

When you enter a transaction, it goes into two places. One is the Activity tab, and this acts as a log for everything you’ve entered. There is also the Transactions tab, which is designed for traders to track their opened and closed positions.

The data also flows through to the Summary tab, where you will be able to see your running portfolio balance, track gains and losses, and also see reports highlighting your overall trading performance. To make sure that all the charts update correctly, click on the Refresh button from the Trading Journal section on the Home tab.

Chart showing portfolio balance by month.

Download the template

Want to try out the template? You can download the trial version here. It is limited to 25 transactions. If you like it, please consider purchasing the full version.

If you run into any issues with the template or have feedback or suggestions for improvements, please feel free to contact me. Please include the name of the template when drafting your message.

If you like the 2024 Stock Trading Template, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow us on Twitter and YouTube.

How to Calculate the PEG Ratio in Excel

February 13, 2024

by howtoexcel conditional formatting formatting investing stocks

What is the PEG Ratio?

The Price/Earnings to Growth (PEG) Ratio is a metric that enhances the traditional price-to-earnings (P/E) ratio by incorporating the company’s earnings growth rate into the calculation. This ratio is calculated by dividing the P/E ratio by the annual earnings per share (EPS) growth rate.

This calculation provides a more nuanced view of a stock’s valuation by factoring in future earnings growth, offering a more comprehensive perspective compared to the P/E ratio alone, which only considers the current price relative to earnings.

Why Investors Find the PEG Ratio Useful

Investors use the PEG ratio for several reasons. It allows for a more balanced comparison between companies with differing growth rates. A high P/E ratio might suggest a stock is overvalued, but when accounting for strong anticipated growth (as the PEG ratio does), the stock might actually be undervalued. This makes the PEG ratio a favored tool for identifying stocks that might offer a better return on investment, particularly when looking for good growth stocks.

The PEG ratio also aids in evaluating the potential overvaluation or undervaluation of a stock in relation to its growth prospects. A PEG ratio below 1 is often interpreted as a stock being undervalued given its earnings growth, whereas a ratio above 1 might indicate overvaluation. This simple benchmark can guide investors in making more informed decisions.

What is the Formula to Calculate the PEG Ratio?

The PEG ratio includes two components: the stock’s P/E ratio and the annual EPS growth rate. This is what the formula looks like:

Creating a template in Excel to calculate the PEG Ratio

Calculating the PEG ratio in Excel is straightforward, allowing investors to efficiently assess multiple stocks’ growth prospects against their valuations. Here’s a step-by-step guide to setup a worksheet to help you do this:

Input Data: Begin by entering the necessary data into Excel. You’ll need the current stock price, EPS, and the annual EPS growth rate. Ideally, you’ll want to setup the inputs first, followed by the formulas at the bottom. This will make it easier to enter the data in logical steps: first the ticker, the stock price, the EPS, and then the annual EPS growth.
- You can get the stock price into excel using the STOCKHISTORY function.
- You can get the EPS from most financial websites. If you’re doing this on Google Sheets, you can directly pull the P/E value as well as the stock price using the GOOGLEFINANCE function.
- For the annual EPS growth rate, you can pull this from a site such as Yahoo Finance (it’s under the ‘Analysis’ section). The percentage used is based on the next 5 years. Although it is percentage, enter it as a number (i.e. 100% would be 100).
Calculate P/E Ratio: In the first calculation cell, I’ll calculate the P/E ratio by dividing the stock price by the EPS.
Calculate PEG Ratio: The next calculation cell is the PEG ratio. This is calculated by taking the P/E ratio and dividing it by the annual EPS growth rate. If a stock is expected to grow at a 50% growth rate, the value should be 50, not 0.5 (i.e. don’t enter it as a percentage). Otherwise, this won’t calculate correctly.
Conditional Formatting. This is an optional step, but one which can help with your analysis. Use conditional formatting rules to highlight the PEG ratio based on its value. If it is less than 1, I’ll apply a green highlighting, a red highlight if it is more than 3, and yellow for anything in-between. Here is how you might set that up with an icon set

Creating conditional formatting rules using icon sets.

Here is how the template looks based on their stock prices and data as of Feb. 1, 2024:

In the above example, we have a fast-growing stock in NVDA, a moderate-growing stock in AAPL, and a slower-growing one in KO. Essentially what we are doing here is looking if the EPS growth rate is higher than the P/E ratio. If it is, that suggests it is not an expensive buy. NVDA, for example, is expected to more than double each year for the next five years, as is evident by its 102% EPS growth rate. While that would make it look like a cheap buy, you’re also assuming that it really can achieve that kind of a growth rate, which would be no easy feat. That leads us to an important part section: the limitations of this calculation.

Limitations of the PEG Ratio

While the PEG ratio offers valuable insights into a stock’s potential value by incorporating growth into the valuation equation, it’s important to recognize its limitations. Understanding these constraints can help investors use the PEG ratio more effectively alongside other analysis tools.

Growth Rate Estimations: The PEG ratio is heavily dependent on the accuracy of the earnings growth rate projections. These forecasts can be highly speculative and vary widely among analysts. Overly optimistic or pessimistic growth estimates can skew the PEG ratio, leading to potentially misleading conclusions about a stock’s valuation.
Historical Growth vs. Future Potential: The PEG ratio typically uses historical data to predict future growth, but past performance is not always a reliable indicator of future results. Companies in rapidly changing industries or facing new competitors may not sustain their previous growth rates.
One-Size-Fits-All Approach: The simplicity of the PEG ratio, while a strength, can also be a drawback. It does not account for the nuances of different industries or the specific risks and opportunities facing individual companies. A low PEG ratio does not guarantee success, nor does a high PEG ratio always indicate a bad investment.
Dividend Exclusion: The PEG ratio does not consider dividend payments. For income-focused investors, a company’s dividend yield and the stability of its dividend payments can be as important as growth. Companies with high dividend yields might be undervalued by the PEG ratio, which only focuses on earnings growth.
Market Conditions: The effectiveness of the PEG ratio can also be influenced by the overall market conditions. During bull markets, growth stocks tend to perform well, and their high PEG ratios may be justified by the market’s momentum. Conversely, in bear markets, value stocks with lower PEG ratios might be more favorable, regardless of growth projections.
Quantitative Focus: The PEG ratio is a purely quantitative tool and does not take qualitative factors into account. Elements such as management quality, brand strength, market position, and industry trends can significantly impact a company’s future performance but are not reflected in the PEG ratio.

If you liked this post on How to Calculate the PEG Ratio in Excel, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow us on Twitter and YouTube.