The Excel GEOMEAN function returns the geometric mean of a set of positive numbers — the nth root of their product. It is the correct average for growth rates, ratios, and compounding returns.
Syntax
| Argument | Description | |
|---|---|---|
number1 | Required | The first value or range. All values must be positive. |
number2, ... | Optional | Up to 254 more values or ranges. Zero or negative numbers cause a #NUM! error. |
How to use it
The geometric mean multiplies all n values together and takes the nth root — making it the right average whenever quantities compound rather than add. It is always less than or equal to the ordinary (arithmetic) average:
For investment returns, convert each year's return to a growth factor (e.g. +8% → 1.08), take the GEOMEAN of the factors, then subtract 1 to get the average annual growth rate — this is the only mathematically correct way to average percentages that compound.
Positive numbers only: because it relies on a product and a root, GEOMEAN requires every value to be greater than zero. A zero or negative argument returns #NUM!. To average returns that include losses, use growth factors (1 + return) so the inputs stay positive.
Compare with AVERAGE (arithmetic mean) and HARMEAN (harmonic mean, best for averaging rates like speed).
Try it: interactive demo
Pick a GEOMEAN example to see the formula and its result.
Practice workbook
Frequently asked questions
When should I use GEOMEAN instead of AVERAGE?
Why does GEOMEAN return a #NUM! error?
How do I average annual returns with GEOMEAN?
GEOMEAN of the factors, then subtract 1. The result is the compound average growth rate (CAGR-style).Is the geometric mean always smaller than the average?
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