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With the help of the Z-Test, we compare the means of two datasets in Excel that are equal or not. In Excel, we have a function for Z-Test named as ZTest, where, as per syntax, we need to have Array and X value (Hypothesized sample mean) and Sigma value (Optional). Mostly X is a minimum of 95% probability, which can take from 0 to 5. Another way of doing Z-Test is from the Data Analysis option from the Data menu tab. There we would need 2 variable ranges, 2 variances of each range. If Z < Z Critical then we will reject the null hypothesis.

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Z TEST Formula in ExcelBelow is the Z TEST Formula:

Z TEST Formula has the below arguments:

Array: Test the hypothesized sample mean for the given set of values.

X: The hypothesized sample mean, which requires a test.

Sigma: This is an optional argument that represents the population standard deviation. If it’s not given or unknown, use the sample standard deviation.

How to Use the Z Test Function in Excel?There are two ways to use Z TEST in Excel, which are:

You can download this Z TEST Excel Template here – Z TEST Excel Template

One sample Z TEST

Two sample Z TEST

One sample Z TEST:

If we have given one dataset, we use the Z TEST function, which falls under the statistical functions category. This Z TEST function in Excel gives the one-tailed probability value of a test.

Z TEST function:

This function gives you the probability that the supplied hypothesized sample mean is greater than the mean of the supplied data values.

Z TEST Function is very simple and easy to use.

Working of Z TEST Function in Excel with ExamplesLet’s understand the working of the Z TEST Function in Excel with some examples.

Example #1We have given the below set of values:

To calculate the one-tailed probability value of a Z Test for the above data, let’s assume the hypothesized population mean is 5. Now we will use the Z TEST formula as shown below:

The result is given below:

Using the above result, we can also calculate the two-tailed probability of a Z TEST.

The formula below calculates the two-tailed P-value of a Z TEST for the given hypothesized population, which is 5.

The result is given below:

Two Sample Z Test:

While using the Z Test, we test a null hypothesis that states that the two population’s mean is equal.

H0: µ1 – µ 2 = 0

H1: µ1 – µ 2 ≠ 0

Where H1 is called an alternative hypothesis, the mean of the two populations is not equal.

Let’s take an example to understand the usage of two sample Z tests.

Example #2Let’s take the example of student’s marks in two different subjects.

Now we need to calculate the variance of both subjects, so we will use the below formula for this:

The above formula applies for Variance 1 (Subject 1) like below:

The result is given below:

The above same formula applies for Variance 2 (Subject 2) like below:

The result is given below:

Now, Go to the Data Analysis tab in the extreme upper right corner under the DATA tab as shown below screenshot:

It will open a dialog box with Data Analysis options.

It will open a dialog box for Z-test, as shown below.

Now in the Variable 1 range box, select subject 1 range from A25:A35

Similarly, in the Variable 2 range box, select subject 2 range from B25:B35

Under the Variable 1 variance box, enter cell B38 variance value.

Under the Variable 2 variance box, enter cell B39 variance value.

The result is shown below:

Explanation

Thus, the means of both populations don’t differ significantly.

Things to RememberZ test is only applicable for two samples when the variance of both populations is known. While using the Z Test function below error occurs:

#VALUE! error: If the value of x or Sigma is non-numeric.

#NUM! error: If the Sigma argument value equals zero.

#N/A error: If the dataset values or passed array is empty.

#DIV/0! error: This error occurs in two conditions:

If the given array contains only one value.

The sigma is not given, and the standard deviation is zero of the passed array.

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

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