Excel Formula for Defining Revenue Bands

Objective

To create a formula in Excel that categorizes a revenue number into specific revenue bands.

Revenue Bands Definition

For the purpose of this example, let's assume the following revenue bands:

• Low: Less than $10,000
• Medium: $10,000 to $50,000
• High: More than $50,000

Excel Formula

The following IF function can be used to categorize revenue based on the defined bands:

=IF(A1 < 10000, "Low", IF(A1 <= 50000, "Medium", "High"))

Explanation of the Formula:

• A1: Represents the cell where the revenue number is inputted. Adjust the cell reference as necessary.
• IF Function: The formula uses nested IF functions to evaluate the revenue:
  • The first condition checks if the revenue in cell A1 is less than $10,000. If true, it returns "Low".
  • If false, it moves to the second IF condition which checks if the revenue is less than or equal to $50,000. If true, it returns "Medium".
  • If both conditions are false, it defaults to returning "High".

Practical Example

1. Suppose cell A1 contains the value 25,000.
2. Applying the formula:
   • The first check (A1 < 10000) evaluates to false.
   • The second check (A1 <= 50000) evaluates to true.
   • Therefore, the returned value would be "Medium".

Conclusion

This Excel formula effectively categorizes revenue numbers into specified bands, enabling better revenue analysis and reporting. Users can modify the thresholds within the formula as per their specific criteria. For advanced learning and methodologies, consider exploring the Enterprise DNA Platform for further resources.