Calculating geometric means in Excel shouldn't return dollar amounts

Are you struggling with the GEOMEAN function in Excel, only to find it returning dollar amounts instead of the expected geometric mean percentage?

3 min readMicrosoft Excel | Help & Support with your Formula, Macro, and VBA problems | A Reddit Community

**Our Take**

This user's frustration is entirely justified. When a spreadsheet function returns dollar amounts instead of a growth rate, the tool isn't broken, but the workflow is missing a critical step. The geometric mean is a powerful measure for understanding rates of change over time, but it doesn't operate on raw dollar values the way a simple average does. That's not a flaw in Excel; it's a misunderstanding of the math underneath the function. The real issue here is that too many tutorials skip the conversion step, leaving users to guess why their results look wrong.

Here's what's happening in practical terms. The GEOMEAN function expects inputs that represent *relative changes*, ratios, not absolute values. When you feed it dollar amounts, it treats them as numbers and returns a geometric mean of those numbers, which is still a dollar amount. That's mathematically correct but entirely useless for your goal. To get a percentage representing growth or change, you first need to convert each dollar figure into a ratio relative to the previous period. For example, if you have values in cells A1 through A80, you create a new column where each cell calculates (A2/A1), (A3/A2), and so on. Then you apply GEOMEAN to that column of ratios. Subtract 1 from the result, and you have your average growth rate as a decimal, multiply by 100 for a percentage.

This missing conversion is a common blind spot in spreadsheet education. Most tutorials show GEOMEAN applied to pre-calculated percentages, assuming the user already knows the data needs reshaping. That assumption creates a barrier, especially for business analytics where raw financial data is the starting point. The course material mentioned in the post likely compounds the confusion by presenting examples that skip the conversion step entirely. It's not that the function is wrong, it's that the teaching hasn't caught up with how people actually use spreadsheets in the real world.

The solution is straightforward. Build a helper column with the ratio formula described above, then apply GEOMEAN to that column. For 80 data points, this takes less than a minute once you know the pattern. If you want a single-cell solution, you can use an array formula like `=GEOMEAN(B2:B81/B1:B80)` (entered with Ctrl+Shift+Enter in older Excel versions), but the helper column approach is clearer for learning. The takeaway: trust the math, not the first result. Spreadsheet tools are only as useful as the data you feed them. Convert your dollars to ratios first, and the geometric mean will finally give you the growth rate you're looking for.

From Microsoft Excel | Help & Support with your Formula, Macro, and VBA problems | A Reddit Community

I have a spreadsheet with over 80 data cells that I need to find the geometric mean for. I can calculate it fine by hand but I need to be able to use excel. Whenever I press the equals geomean function and enter my data and close the parentheses, it spits out a dollar amount comparable in size to the two data points I entered into the function and not a percentage representing the growth or change between the two data points. If someone could provide either a working formula or point me towards a tutorial relevant to business data…

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