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Return on Capital Employed Formula (Table of Contents)

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What is Return on Capital Employed Formula?The term “return on capital employed” refers to the profitability ratio that is used by analysts to check how effectively an entity is able to use the capital employed in the business to generate profits during a certain period of time. In other words, the return on capital employed is a measure of how many dollars can be generated from each dollar of the capital employed. The capital employed includes both shareholders equity and debt liabilities. The formula for return on capital employed can be derived by dividing the company’s operating profit or earnings before interest and taxes (EBIT) by the difference between total assets and total current liabilities. Mathematically, ROCE Formula is represented as,

Return on Capital Employed = EBIT / (Total Assets – Total Current Liabilities)

The formula for return on capital employed can also be expressed by dividing the operating profit by the summation of shareholder’s equity and long term liabilities. Mathematically, ROCE Formula is represented as,

Return on Capital Employed = EBIT / (Shareholder’s Equity + Long Term Liabilities)

Examples of Return on Capital Employed Formula (With Excel Template)

You can download this Return on Capital Employed Formula Excel Template here – Return on Capital Employed Formula Excel Template

Return on Capital Employed Formula – Example #1Let us take the example of a hypothetical company. As per the recent annual report, the reported operating profit is $50,000, while the total assets and the total current liabilities stood at $1,000,000 and $500,000 respectively as on the balance sheet date. Calculate the return on capital employed for the company during the year.

Solution:

Return on Capital Employed is calculated using the formula given below

Return on Capital Employed = EBIT / (Total Assets – Total Current Liabilities)

Return on Capital Employed = $50,000 / ($1,000,000 – $500,000)

Return on Capital Employed = 10%

Therefore, the company generated a return on capital employed by 10% during the year.

Return on Capital Employed Formula – Example #2Let us take the example of another company that reported net income of $40,000 in its income statement. Further, it recorded interest expense and tax payment of $10,000 and $9,000 respectively. On the other hand, the shareholder’s equity and long term liabilities stood at $500,000 and $1,000,000 respectively as on balance sheet date. Calculate the return on capital employed for the company during the year.

Solution:

EBIT is calculated using the formula given below

EBIT = Net Income + Interest Expense + Taxes Paid

EBIT = $40,000 + $10,000 + $9,000

EBIT = $59,000

Return on Capital Employed is calculated using the formula given below

Return on Capital Employed = $59,000 / ($500,000 + $1,000,000)

Return on Capital Employed = 3.93%

Therefore, the company generated return on capital employed of 3.93% during the year.

Return on Capital Employed Formula – Example #3Let us take the example of Apple Inc. As per the latest annual report, Apple reported net income of $59,531 Mn, interest expense of $3,240 Mn and provision for income taxes of $13,372 Mn. On the other hand, the total asset and total current liabilities stood at $365,725 Mn and $116,866 Mn respectively as on balance sheet. Calculate the return on capital employed for Apple Inc.

Solution:

EBIT is calculated using the formula given below

EBIT = Net Income + Interest Expense + Taxes Paid

EBIT = $59,531 Mn + $3,240 Mn + $13,372 Mn

EBIT = $76,143 Mn

Return on Capital Employed is calculated using the formula given below

Return on Capital Employed = EBIT / (Total Assets – Total Current Liabilities)

Return on Capital Employed = $76,143 Mn / ($365,725 Mn – $116,866 Mn)

Return on Capital Employed = 30.60%

Therefore, Apple Inc. booked to return on capital employed of 30.60% during last year.

Explanation of ROCE FormulaThe formula for return on capital employed can be derived by using the following steps:

Step 1: Firstly, determine operating profit or EBIT which is usually provided directly in the income statement. However, if it is not mentioned directly, then it can be computed by adding back interest expense and taxes paid to the net income of the company from its income statement.

Operating Profit, EBIT = Net Income + Interest Expense + Taxes Paid

Step 3: Next, figure out the total current liabilities from the balance sheet of the company, which includes liabilities that are to be paid within one year, such as trade payable, accrued expenses, interest payable, etc.

Step 4: Finally, the formula for return on capital employed can be derived by diving the operating profit (step 1) by the difference between total assets (step 2) and total current liabilities (step 3) as shown below.

Return on Capital Employed = EBIT / (Total Assets – Total current liabilities)

Relevance and UsesIt is important to understand the concept of return on capital employed because this profitability ratio is usually used by investors and analysts to assess how effectively a company is able to utilize the capital employed in the business. Typically, return on capital employed is considered to be a better indicator than the return on equity because of the former analyses the profitability relative to both equity and debt. It is usually used to compare companies from the same industry and of a similar scale. In some cases, companies with large cash reserves tend to include the cash in the employed capital computation which is not the usual practice.

Return on Capital Employed Formula CalculatorYou can use the following Return on Capital Employed Calculator

EBIT Total Assets Total Current Liabilities Return on Capital Employed Return on Capital Employed= EBIT = (Total Assets − Total Current Liabilities)

0

= 0 (

0

−

0

)

Recommended ArticlesThis is a guide to Return on Capital Employed Formula. Here we discuss How to Calculate Return on Capital Employed along with practical examples. We also provide a Return on Capital Employed Calculator with a downloadable excel template. You may also look at the following articles to learn more –

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## Return On Total Assets Formula

Return on Total Assets Formula (Table of Contents)

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What is Return on Total Assets Formula?The term “Return on Total Assets” refers to the financial ratio used as an indicator to check how well a company can use its assets to generate earnings during a specific period. In other words, it measures the profitability of the company’s available assets. The Return on Total Assets can be derived by dividing the company’s earnings before interest and taxes (EBIT) by its average total assets. Mathematically, it is represented as,

Return on Total Assets = EBIT / Average Total Assets

Examples of Return on Total Assets Formula (With Excel Template)Let’s take an example to understand the calculation of the Return on Total Assets in a better manner.

You can download this Return on Total Assets Formula Excel Template here – Return on Total Assets Formula Excel Template

Return on Total Assets Formula – Example #1Let us take the example of a company with reported earnings before interest and taxes (EBIT) of $75,000 as per the income statement. As per the balance sheet for the year ending on December 31, 2023, the average total assets of the company stood at $5,000,000. Calculate the Return on Total Assets for the company during the period.

Solution:

The formula to calculate Return on Total Assets is as below:

Return on Total Assets = EBIT / Average Total Assets

Return on Total Assets = $75,000 / $5,000,000

Return on Total Assets = 1.50%

Therefore, the company reported a Return on Total Assets of 1.50% during the period.

Return on Total Assets Formula – Example #2Let us take the example of ABC Ltd, which reported a net profit of $50,000 on a turnover of $500,000. Per its income statement, the interest expense and income taxes stood at $15,000 and $30,000, respectively. Further, as per the balance sheet, the opening and closing value of the total assets is $3,900,000 and $4,100,000, respectively. Calculate the Return on Total Assets for ABC Ltd based on the latest reported financials.

Solution:

The formula to calculate EBIT is as below:

EBIT = Net Income + Interest Expense + Income Taxes

EBIT = $50,000 + $15,000 + $30,000

EBIT = $95,000

The formula to calculate Average Total Assets is as below:

Average Total Assets = (Opening Total Assets + Closing Total Assets) / 2

Average Total Assets = ($3,900,000 + $4,100,000) / 2

Average Total Assets = $4,000,000

The formula to calculate Return on Total Assets is as below:

Return on Total Assets = EBIT / Average Total Assets

Return on Total Assets = $95,000 / $4,000,000

Return on Total Assets = 2.375%

Therefore, ABC Ltd managed a Return on Total Assets of 2.375% during the last reported year.

Return on Total Assets Formula – Example #3Take the real-life example of Apple Inc., which reported a net income of $59,531 Mn during the last reported financial year. As per the annual report for the year ending September 29, 2023, the interest expense and provision for income taxes for the year stood at $3,240 Mn and $13,372 Mn, respectively. Further, the total asset at the beginning and end of the year stood at $375,319 Mn and $365,725 Mn, respectively. Calculate the Return on Total Assets for Apple Inc. based on the information.

Solution:

The formula to calculate EBIT is as below:

EBIT = Net Income + Interest Expense + Income Taxes

EBIT = $59,531 Mn + $3,240 Mn + $13,372 Mn

EBIT = $76,143 Mn

The formula to calculate Average Total Assets is as below:

Average Total Assets = (Opening Total Assets + Closing Total Assets) / 2

Average Total Assets = ($375,319 Mn + $365,725 Mn) / 2

Average Total Assets = $370,522 Mn

The formula to calculate Return on Total Assets is as below:

Return on Total Assets = EBIT / Average Total Assets

Return on Total Assets = $76,143 Mn / $370,522 Mn

Return on Total Assets = 20.55%

Therefore, Return on Total Assets for Apple Inc. stood at 20.55% for the year ending on September 29, 2023.

ExplanationThe formula for Return on Total Assets can be derived by using the following steps:

Step 1: First, calculate the company’s net income from its income statement. Next, determine the interest expense incurred and corporate taxes paid during the year. Add the interest expense and tax to the net income to compute the company’s EBIT.

EBIT = Net Income + Interest Expense + Tax

Step 2: Next, determine the company’s total assets at the beginning and the end of the current year. The total assets include short-term and long-term assets for the period under consideration. Now, add the values for total assets and divide by 2 to arrive at the average total assets.

Average Total Assets = (Opening Total Assets + Closing Total Assets) / 2

Step 3: Finally, the formula for Return on Total Assets can be derived by dividing the company’s EBIT (step 1) by its average total assets (step 2), as shown below.

Return on Total Assets = EBIT / Average Total Assets

Relevance and Uses of Return on Total Assets FormulaIt is one of the important profitability metrics that allows an analyst to assess the effectiveness of a company in its asset utilization. A higher Return on Total Assets value indicates favorable healthy asset utilization to produce greater earnings, eventually attracting investors. Inherently, a positive ratio signifies an upward trend for profit.

The ratio can be used to compare companies of the same scale and in a similar industry. However, comparing companies from different industries is meaningless as asset utilization varies significantly.

Return on Total Assets Formula CalculatorYou can use the following Return on Total Assets Calculator

EBIT Average Total Assets Return on Total Assets Formula Return on Total Assets Formula = EBIT =

Average Total Assets

0

= 0

0

Recommended Articles

This is a guide to the Return on Total Assets Formula. Here we discuss calculating the Return on Total Assets and practical examples. We also provide a Return on Total Assets calculator with a downloadable Excel template. You may also look at the following articles to learn more –

## Int In Excel (Formula, Examples)

INT in Excel

INT in Excel is a very simple function used to convert any number into an integer value. Integer values are any number that is a whole number but can be a positive or negative number. Int function can consider any number, whether it is a decimal, fraction, or square root value, but in the end, we will be getting a whole number out of it.

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INT Formula in Excel:

Below is the INT Formula in Excel.

where

How to Use INT Function in Excel?INT function in Excel is very simple and easy to use. Let us understand the working of the INT function in Excel by some INT Formula examples. INT function can be used as a worksheet function and VBA function.

You can download this INT Function Excel Template here – INT Function Excel Template

Example #1The below-mentioned table contains a value in cell “C8”, i.e. 6.79, which is a positive number; I need to find out the nearest integer for 6.79 using the INT function in Excel.

Select the cell “E8,” where the INT function needs to be applied.

A dialog box appears where arguments (number) for the INT function need to be filled or entered.

i.e. =INT(C8).

It removes the decimal from the number and returns the integer part of the number, i.e. 6.

Example #2The below-mentioned table contains a value in cell “C14”, i.e. -5.89, which is a negative number; I need to find out the nearest integer for -5.89 using the INT function in Excel. Select cell E14, where the INT function needs to be applied.

A dialog box appears where arguments (number) for the INT function need to be filled or entered.

i.e. =INT(C14)

It removes the decimal from the number and returns the integer part of the number, i.e. -6.

Example #3In the below mention example, I have the date of birth ( 16th May 1982) in cell “J8” I need to calculate the age in cell “L8” using the INT function in Excel.

Before the INT function in Excel, let’s know about the YEARFRAC function; the YEARFRAC function returns a decimal value representing fractional years between two dates. I.e. Syntax is =YEARFRAC (start_date, end_date, [basis]). It returns the number of days between 2 dates as a year.

Here the INT function is integrated with the YEARFRAC function in cell “L8”.

YEARFRAC formula takes the date of birth and the current date (given by the TODAY function) and returns the output value as age in years.

i.e. =INT(YEARFRAC(J8,TODAY()))

It returns the output value i.e. 36 years.

Example #4Usually, Excel stores the date value as a number, considering the date as an integer and the time as a decimal portion. If a cell contains a date and time as a combined value, you can only extract the date value using the INT function in Excel. Cell “P8” contains the date and time as a combined value. Here I need to extract the date value in cell “R8.”

Select the cell R8 where the INT function needs to be applied.

i.e. =INT(P8)

It removes a decimal portion from the date & time value and returns only the date portion as a number, where we need to discard the fraction value by formatting in the output value.

i.e. 11/12/18

Example #5The below-mentioned table contains a value less than 1 in cell “H13”, i.e. 0.70, which is a positive number; I need to find out the nearest integer for decimal value, i.e. 0.70, using the INT function in Excel. Select cell I13 where the INT function needs to be applied.

A dialog box appears where arguments (number) for the INT function need to be filled or entered.

i.e. =INT(H13)

Here, it removes the decimal from the number and returns the integer part of the number, i.e. 0

Things to Remember

In the INT function, Positive numbers are rounded toward 0, while negative numbers are rounded away from 0. E.G. =INT(2.5) returns 2 and =INT(-2.5) returns -3.

Both INT() and TRUNC() functions are similar when applied to positive numbers; both can convert a value to its integer portion.

If any wrong type of argument is entered in the function’s syntax, it results in #VALUE! Error.

If the referred cell is not a valid or invalid reference in the INT function, it will return or result in #REF! Error.

#NAME? Error occurs when Excel does not recognize specific text in the formula of the INT function.

Recommended ArticlesThis has been a guide to INT Function in Excel. Here we discuss the INT Formula in Excel and how to use the INT function in Excel, along with practical examples and downloadable Excel templates. You can also go through our other suggested articles –

## Count In Excel (Formula, Examples)

What is COUNT in Excel?

The COUNT in Excel is a function that counts the number of cells that consists of numeric values in a selected range and ignores all the other entries in the range. For example, the formula “=COUNT(A6:A20)” counts all the cells with numerical values (code number) in the cell range A6:A20, which corresponds to 7.

The COUNT function counts numeric values, including the date, time, percentages, negative numbers, formulas, and fractions.

Key Highlights

The COUNT in Excel is a completely programmed function that can be used for an array

The COUNT function family has a total of five variants- COUNT, COUNTIF, COUNTIFS, COUNTA, and COUNTBLANK

To count logical values, we use the COUNTA variant of the COUNT function family

To count numbers meeting certain criteria, we use either COUNTIF or COUNTIFS function in Excel

The function COUNT in Excel does not count formula errors and logical values

The COUNT function counts dates, too, as Microsoft Excel stores the dates as serial numbers

The function COUNT in Excel does not count the logical values- TRUE or FALSE

COUNT in Excel Syntax:The syntax for the COUNT Function in Excel is-

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Explanation:

Value1: A required argument of the COUNT function indicates the first item or cell of the specified range.

Value2: It is an optional argument of the COUNT function in Excel that denotes the second set of cells or ranges we wish to count. Once we put the first Value1, all other values become optional.

Note: We can provide up to 256 values to the COUNT function.

The return of the COUNT function is always either zero or greater than zero.

How to use the COUNT in Excel?Consider the examples below to understand how we can use the function COUNT in Excel.

You can download this COUNT in Excel Template here – COUNT in Excel Template

Example #1Solution:

Step 1: Place the cursor in cell C7 and enter the formula,

=COUNT(A6:A20)

The above formula will count the numeric values in the given list, as shown below.

Step 2: Press the Enter key to get the below result

The selected range contains 15 values, but the COUNT function in Excel only counts the numerical values and ignores everything else. As a result, it returns 4 as the total number of numerical codes.

Example #2The table below shows a list of dates. We want to count the total dates using the COUNT in Excel function.

Solution:

Step 1: Place the cursor in cell C8 and enter the formula,

=COUNT(A6:A12)

Step 2: Press the Enter key to get the below result,

The total number of selected cells is seven, but the COUNT function returned the value 5 because two dates in the given list are written in an incorrect format.

The below image shows the dates with incorrect format (highlighted in RED)

Example #3The table below shows the IDs of five employees, as well as their wages and attendance for the first week of January 2023. If an employee is present, his attendance is marked as 1; if absent, his attendance is marked as A. We want to use the COUNT function in Excel to calculate the Employee’s total wages based on his weekly attendance.

Solution:

Step 1: Place the cursor in cell J6 and enter the formula,

=COUNT(C2:I2)

Step 2: Press the Enter key to get the Total no. of Paid Days as shown below

The COUNT in Excel function returns the Total no. of Paid Days as 6.

Now,

Step 3: Place the cursor in cell K2 and enter the formula,

=B6/7*J6

Step 4: Press the Enter key to get the Total Wages of the week for Empl ID 1005

Step 5: Follow the same steps to get the Total wages for all the Emp IDs to get the below result

COUNT in Excel with IF condition

Syntax-

=IF(logical_test,[value_if_true],[value_if_false])

Example #4Consider the above example of employees with IDs, wages, and weekly attendance. Using the COUNT and IF functions, we want to find eligible employees for Full Payment.

Solution:

Step 1: Place the cursor in cell L2 and enter the formula,

=IF (COUNT(C6:I6)=7,” Full Pay”, “Not Full Pay”)

COUNT(C6:I6): There are 7 working days in the week. Therefore, an employee present on all the days will be eligible for Full Payment.

Thus, the condition is written as COUNT(C6:I6)=7

Step 2: Press the Enter key to get the below result

Now,

Step 3: Enter the same formula in the remaining cells to get the below output

Combined with the IF condition, the COUNT function shows that only the person with Emp ID- 1D006 is eligible for Full Payment. Since all other employees were absent on one or the other day that week, they are not eligible for full payment.

Difference Between COUNT and COUNTA

The function COUNT in Excel counts the number of cells having numeric values within a cell range, whereas the COUNTA function counts the number of non-empty or blank cells within a given range.

The function COUNT in Excel counts numeric values and dates, whereas the function COUNTA counts all the cells within a range irrespective of the data type.

Syntax of COUNTA function is-

=COUNTA (value1, [value2], …)

Difference between COUNT and COUNTA with ExampleThe table below shows 10 rows with 6 numeric codes, 2 non-numeric codes, and 2 blank cells.

The COUNT function counts the number of cells with numeric codes and gives the result of 6.

The COUNTA function counts all the cells having codes, excludes the empty cells, and gives the result of 9.

Things to Remember

Only numerical values are counted in the COUNT function.

The COUNT function ignores empty cells, text and string values, and error values in the array.

If the COUNT function is applied to an empty range of cells, the result will always be zero.

If a text follows the number, COUNT ignores that value also. For example, =COUNT (“145 Number”) would return the result as 0.

If logical values such as TRUE or FALSE are supplied to the formula, the COUNT function will count these logical values.

The result will be zero if the same TRUE or FALSE is supplied in a range.

If you want the count of all the values in the given range, use COUNTA, which counts whatever comes it’s way.

Frequently Asked Questions (FAQs) Q1) How do I count cells in Excel?Answer: In Excel, we can count cells using any of the COUNT function variants: COUNT, COUNTA, COUNTIF, and COUNTBLANK.

COUNT: To count cells with numeric values

COUNTA: To count non-empty cells

COUNTBLANK: To count blank or empty cells

COUNTIF: To count cells meeting specified criteria

Q2) What is the significance of the COUNT function in MS Excel Class 9?Answer: We can use the COUNT() function to sum or add the number of cells that contain numbers in the specified cell. The count function can perform the complex calculation of adding numbers in a large data set, thus saving time and effort.

Q3) What is the main difference between COUNT and Countif?The COUNT in Excel function counts the number of cells containing numeric data or entries, whereas the COUNTIF function counts the number of cells meeting the given criteria.

For example, the table below shows students’ Maths marks out of 50. Here, we use the COUNTIF function to count the number of students who have scored more than or equal to 35 and passed the test.

Recommended ArticlesThe above article is EDUCBA’s guide on using the function COUNT in Excel. For more information related to Excel formulas and functions, EDUCBA recommends the below articles.

## Debt To Income Ratio Formula

Debt to Income Ratio Formula (Table of Contents)

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Debt to Income Ratio FormulaThe debt to income ratio is the measure of estimating an individual’s capacity to repay the debt by comparing his recurring monthly debt to gross monthly income.

Examples of Debt to Income Ratio Formula Example #1

You can download this Debt to Income Ratio Template here – Debt to Income Ratio Template

Let’s take an example for a person, Jim, whose Gross Monthly Income is $10000. Jim has a housing mortgage payment of $3000 per month. Jim has also taken a car loan with a monthly payment of $1000. He also has other smaller debt payments, which amount to $500 per month.

Therefore,

Overall Recurring Monthly Debt for Jim = $4500

Gross Monthly Income = $10000

Using the Debt to Income Ratio Formula, We get –

Debt to Income Ratio = Overall Recurring Monthly Debt for Jim/Gross Monthly Income

Debt to Income Ratio = $4500/$10000

Debt to Income Ratio = 0.45 or 45%

Example #2Generally, Debt to Income Ratios is used by lenders to determine whether the borrower will be able to repay the loan. It is assumed that the highest debt to income ratio is 43%, beyond which the borrower has a diminishing ability to return the loan.

Suppose John has a gross monthly income of $20000 while Alan has a gross monthly income of $15000. John has a recurring monthly debt of $10000, while Alan has a recurring monthly debt of $5000.

Therefore,

The debt to Income Ratio of John is Calculated as:

Debt to Income Ratio of John = Recurring Monthly Debt/Gross Monthly Income

Debt to Income Ratio of John = $10000/$20000

Debt to Income Ratio of John = 0.5 or 50%

Debt to Income Ratio of Alan is Calculated as:

Debt to Income Ratio of Alan = Recurring Monthly Debt/Gross Monthly Income

Debt to Income Ratio of Alan = $5000/$15000

Debt to Income Ratio of Alan = 0.33 or 33%

Example #3There are two types of Debt to Income ratio, which are the Front-end debt to income ratio and the Back-end debt to income ratio. The front-end debt to income ratio generally indicates the percentage of income that goes towards housing costs, whether rent or payment towards a mortgage, which includes both principal and interest. The back-end debt to income ratio encompasses all other recurring debt payments such as car loans, credit card payments, education loans, etc.

Lenders use a debt to income ratio of 28/36 to determine whether the borrower should be lent money or not. 28/36 norm indicates that 28% of the gross income can be expensed for housing costs, while 36% can be used to expense all other recurring debt payments.

For example,

If the gross monthly income = $10000.

The amount allowed for housing expenses = 0.28*10000

The amount allowed for housing expenses = $2800

The amount allowed for housing expenses and recurring debt = 0.36*10000

The amount allowed for housing expenses and recurring debt = $3600

Therefore, the amount allowed for housing expenses is $2800, and the amount allowed for housing expenses and recurring debt is $3600

Explanation of Debt to Income Ratio FormulaLenders use the debt to income ratio to determine whether a further loan could be issued to the borrower and whether the borrower can return the loan payments. It is generally preferred that the borrower should have a low Debt to Income Ratio. A ratio of 28% is usually preferable, while 43% is the highest that the Debt to Income ratio could be. A ratio of debt to income higher than 43% signals that the borrower might not be able to return the loan taken.

As can be understood from the formula, there are two ways of lowering one’s debt to income ratio. One can reduce their recurring monthly debt or increase their gross monthly income. Lowering recurring debt payments can be achieved by prepaying some of the loans.

Significance and Use of Debt to Income Ratio FormulaAs stated above, lenders use debt to income ratio to determine whether borrowers should be issued new loans or not. There are two types of Debt to Income ratio, which are the Front-end debt to income ratio and the Back-end debt to income ratio. The front-end debt to income ratio generally indicates the percentage of income that goes towards housing costs, whether rent or payment towards a mortgage, which includes both principal and interest. The back-end debt to income ratio encompasses all other recurring debt payments such as car loans, credit card payments, education loans, etc.

Numerator 28 indicates the Front-end debt to income ratio should be 28% of the overall gross monthly income. In contrast, denominator 36 indicates that the back-end debt to income ratio should be 36% of the overall gross monthly income.

Debt to Income Ratio Formula CalculatorYou can use the following Debt to Income Ratio Formula Calculator

Recurring Monthly Debt Gross Monthly Income Debt to Income Ratio Formula Debt to Income Ratio Formula = Recurring Monthly Debt =

Gross Monthly Income

0

= 0

0

Debt to Income Ratio Formula in Excel (With Excel Template)

Here we will do an example of the Debt to Income Ratio Formula in Excel. It is very easy and simple. You need to provide the two inputs, i.e., Recurring Monthly Debt and Gross Monthly Income

You can easily calculate the Debt to Income Ratio Formula in the template provided.

ConclusionDebt to income ratio is one of the essential criteria along with the credit score that creditors use to determine whether further debt can be given to the borrowers. The historical limit of 28/36 has been extended since, currently, all over the world, housing prices are higher. Even if borrowers have DTI ratios as high as 50%, they are given loans, albeit maybe at a higher interest rate than others.

Recommended ArticlesThis has been a guide to the Debt to Income Ratio Formula; here, we discuss its uses along with practical examples. We also provide a Debt to Income Ratio calculator and a downloadable Excel template.

## Formula Challenge #2: Matching Terms

This Formula Challenge originally appeared as part of Google Sheets Tip #52, my weekly newsletter, on 27 May 2023.

Sign up here so you don’t miss out on future Formula Challenges:

Find all the Formula Challenges archived here.

Your ChallengeStart with this small data table in your Google Sheet:

Your challenge is to create a single-cell formula that takes a string of search Terms and returns all the Results that have at least one matching term in the Terms column.

For example, this search (in cell E2 say)

Raspberries, Orange, Apple

would return the results (in cell F2 say):

Nine

like this (where the yellow is your formula):

Check out the ready-made Formula Challenge template.

The Solution Solution One: Using the FILTER functionor even:

These elegant solutions were also the shortest solutions submitted.

There were a lot of similar entries that had an ArrayFormula function inside the Filter, but this is not required since the Filter function will output an array automatically.

How does this formula work?

Let’s begin in the middle and rebuild the formula in steps:

=SPLIT(

E2

,

", "

)

The SPLIT function outputs the three fruits from cell E2 into separate cells:

Raspberries Orange Apple

so the output is now:

Then bring the power of regular expression formulas in Google Sheets to the table, to match the data in column B. The pipe character means “OR” in regular expressions, so this formula will match Raspberries OR Orange OR Apple in column B:

On its own, this formula will return a #VALUE! error message. (Wrap this with the ArrayFormula function if you want to see what the array of TRUE and FALSE values looks like.)

However, when we put this inside of a FILTER function, the correct array value is passed in:

and returns the desired output. Kaboom!

Solution Two: Using the QUERY function=QUERY(

A2:B11

,

"select A where B contains '"

&JOIN(

"' or B contains '"

,SPLIT(

E2

,

", "

))&

"'"

)

As with solution one, there is no requirement to use an ArrayFormula anywhere. Impressive!

This formula takes a different approach to solution one and uses the QUERY function to filter the rows of data.

The heart of the formula is similar though, splitting out the input terms into an array, then recombining them to use as filter conditions.

=JOIN(

"' or B contains '"

,SPLIT(

E2

,

", "

,0))

which outputs a clause ready to insert into your query function, viz:

Raspberries' or B contains 'Orange' or B contains 'Apple

The QUERY function uses a pseudo-SQL language to parse your data. It returns rows from column A, whenever column B contains Raspberries OR Orange OR Apple.

Wonderful!

I hope you enjoyed this challenge and learnt something from it. I really enjoyed reading all the submissions and definitely learnt some new tricks myself.

SPLIT function caveatsThere are two dangers with the Split function which are important to keep in mind when using it (thanks to Christopher D. for pointing these out to me).

Caveat 1

The SPLIT function uses all of the characters you provide in the input.

So

=SPLIT(

"First sentence, Second sentence"

,

", "

)

will split into FOUR parts, not two, because the comma and the space are used as delimiters. The output will therefore be:

First sentence Second sentence

across four cells.

Caveat 2

Datatypes may change when they are split, viz:

=SPLIT(

"Lisa, 01"

,

","

)

gives an output of

Lisa 1

where the string has been converted into a number, namely 1.

See the other Formula Challenges here.

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