How to Use the INTERCEPT Function in Excel

In this guide, we will delve into the INTERCEPT function available in Microsoft Excel and Google Sheets. The INTERCEPT function is crucial for finding the point where a line determined by linear regression crosses the y-axis. This capability is immensely useful in data analysis and forecasting by using a series of known data points.

Syntax

The syntax for the INTERCEPT function is identical in both Excel and Google Sheets:

INTERCEPT(known_y's, known_x's)

• known_y's: This is the set of y-values. These are considered the dependent data points.
• known_x's: This is the set of x-values. These are considered the independent data points.

Examples

Example 1: Simple Linear Regression

In this example, we use a dataset with known x and y values to calculate the y-intercept of the regression line.

The intercept calculation uses the following formula:

=INTERCEPT(B2:B4, A2:A4)

Here, B2:B4 denotes the y-values (2, 4, 6), and A2:A4 represents the x-values (1, 2, 3). The calculated y-intercept of the regression line, where the line crosses the y-axis, is 0 in this scenario.

Example 2: Real-World Application

Consider a scenario where a company analyzes the relationship between its advertising expenditures and the resulting sales to determine the regression line’s intercept.

The INTERCEPT function helps in calculating the y-intercept of the regression line that best fits this data:

=INTERCEPT(B2:B4, A2:A4)

This calculated intercept provides valuable insights, indicating the expected sales when advertising expenses are $0. Such information is crucial for strategic planning and decision-making.

Using the INTERCEPT function, Excel and Google Sheets users can efficiently carry out linear regression analyses and forecast unknown values based on established data points, making it an invaluable tool for thorough data examination and prediction.

More information: https://support.microsoft.com/en-us/office/intercept-function-2a9b74e2-9d47-4772-b663-3bca70bf63ef