The LOGNORM.DIST function in Excel is essential for users who require the cumulative distribution of a lognormal variable. It helps in providing insights into the probability distributions of data that are positively skewed, enabling better decision-making in fields such as finance and statistics.

Syntax

LOGNORM.DIST(x, mean, standard_dev, cumulative)

• x: The value for which you want to calculate the distribution.
• mean: The arithmetic mean of the natural logarithm of the distribution.
• standard_dev: The standard deviation of the natural logarithm of the distribution.
• cumulative: A logical value that determines the form of the function. If TRUE, it returns the cumulative distribution function; if FALSE, it returns the probability density function.

Example #1

=LOGNORM.DIST(1, 0, 0.5, TRUE)

This function calculates the cumulative lognormal distribution for x = 1, with a mean of 0 and a standard deviation of 0.5. The result might be approximately 0.788.

Example #2

=LOGNORM.DIST(2, 1, 0.3, TRUE)

This function evaluates the cumulative lognormal distribution for x = 2, with a mean of 1 and a standard deviation of 0.3. The result could be around 0.982.

Example #3

=LOGNORM.DIST(0.5, 0, 1, FALSE)

Here, the function calculates the probability density for x = 0.5, with a mean of 0 and a standard deviation of 1. The output might be approximately 0.398.

Error handling

• NUM! This error occurs when the standard deviation is less than or equal to zero.
• VALUE! This error signals that one or more of the input parameters are of the wrong type, such as text instead of numbers.
• N/A This error indicates that the supplied values for mean or standard deviation do not yield a valid lognormal distribution.

Conclusion

The LOGNORM.DIST function is a powerful tool for analyzing datasets following a lognormal distribution. By comprehensively understanding its syntax, usage, and potential errors, users can leverage this function efficiently for making informed statistical decisions.