DDB Excel Formula

Author Zaheer    Category Formulas     Tags , ,

If a function can be used meaningfully in a database program, then it can reduce the workload of the users significantly. There are many useful functions in the Excel program. Just you have to pick the perfect one for your database. There you can see similarities in the spelling of the functions, but you should have to be sure about all the terms that are used in the function to use it confidently in the database program. The DDB is an Excel function which denotes the Double-Declining Balance. This function uses the method of double-declining balance or even it can use the method that you will specify. The syntax is very important for a function, same for the DDB. If the syntax is not maintained properly – accurate result will not be achieved.

The DDB function syntax is “DDB (cost,salvage,life,period,factor)”. The sequence and symbols all should be used accurately. In the DDB function, cost denotes the asset’s initial cost; salvage denotes the value which will be at the end of depreciation, the value can be zero; life denotes the asset’s useful life or number of periods for which the asset will be depreciated; the depreciation will be calculated over a period, this period is denoted by the period; and the balance declines at a rate, this is denoted by factor. Here, it should be stated that life and period should use the same unit, and if the factor omitted, then it will be assumed as 2. Another important thing is that all the five arguments should be positive numbers. To use the function perfectly, you should be familiar with these terms. The following example may help the users and learners to understand this function.

Assuming that the initial cost is 2400, salvage value is 300, and lifetime in years is 10; then the result will be as follows. DDB(2400,300,10 * 12,1,2) which will provide the result for the depreciation of the first month and it is 40.00. If the function is given like this DDB(2400,300,10,10), then the Excel will assume the factor as 2 and will provide a result of 22.12. To understand the function more clearly you can read the help file of the Excel program. There you will get more examples with user-friendly features.

Some remarks about the function DDB are as follows. An accelerated rate is considered in computing the depreciation using the method of double-declining balance. In this method the first period’s depreciation is highest, then it decreases in the successive periods. This method follows a certain formula to find out the depreciation. To know more about the formula you can visit the Microsoft site. If a user does not want to use the method of double-declining balance, then the factor should be changed. In case of the method of straight-line depreciation the function VDB can be used. Before applying any function in your Excel database be sure what you want, then select the suitable function which will give the exact result that you want.

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