## What is a Z-Score?

A Z-Score is a measure of how many standard deviations a given data point is from the mean of a data set. It is calculated by subtracting the mean value from the data point in question and dividing it by the standard deviation of the data set. It is a useful tool for measuring the relative position of a data point within a data set.

## Calculating a Z-Score in Excel

Excel has a built-in function for calculating Z-Scores, which is called NORMSINV. This function takes a probability as an argument and returns the corresponding Z-Score. An example of this is given below:

• P ( Z ≤ Zo ) = 0.95 1.645

In this example, 0.95 is the probability given and 1.645 is the corresponding Z-Score. To calculate the Z-Score in Excel, this formula would be used:

• =NORMSINV(0.95)

## Interpreting a Z-Score

Once a Z-Score has been calculated, it can be used to interpret the data point in question. A Z-Score of 0 indicates that the data point is exactly equal to the mean of the data set. A Z-Score higher than 0 indicates that the data point is greater than the mean and a Z-Score lower than 0 indicates that the data point is less than the mean.

## Related Questions

• What is the formula for calculating Z-Scores?
• What is the purpose of a Z-Score?
• What do negative Z-Scores mean?
• How do you calculate a Z-Score in Excel?
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