{"id":146648,"date":"2025-03-20T23:46:56","date_gmt":"2025-03-20T23:46:56","guid":{"rendered":"https:\/\/peraltafinancing.com\/accounting\/how-to-calculate-weighted-average\/"},"modified":"2025-03-20T23:46:56","modified_gmt":"2025-03-20T23:46:56","slug":"how-to-calculate-weighted-average","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=146648","title":{"rendered":"How to Calculate Weighted Average"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>From inventory valuation to sales forecasting, there are plenty of times you may need to calculate a weighted average in your business. And you don\u2019t have to be a mathematician to find it. Learning how to calculate weighted average is a relatively easy process.\u00a0<\/p>\n<p><span id=\"more-74599\"\/><\/p>\n<h3 class=\"vv-40 fz-18 fw-b bdr-btm-lb-40 mb-2\">Skip Ahead<\/h3>\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-weighted-average\">What is a weighted average?<\/h2>\n<p><strong>The weighted average is the average, or mean, of a data set that gives more weight to some numbers than others.<\/strong>\u00a0<\/p>\n<p>Calculate weighted average if some values in a data set are more important than others.\u00a0<\/p>\n<p>Finding your weighted average is more accurate than finding your simple average (aka unweighted average), where each data point receives the same \u201cimportance.\u201d\u00a0<\/p>\n<p>Businesses use weighted averages to improve decision-making, cost calculations, forecasting, and financial analyses.\u00a0<\/p>\n<p>You might calculate the weighted average for:<\/p>\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.patriotsoftware.com\/blog\/accounting\/inventory\/\"><strong>Inventory<\/strong><\/a><strong> <\/strong>to see your average cost per unit of inventory (especially helpful if you have identical and intertwined inventory items)<\/li>\n<li><a href=\"https:\/\/www.patriotsoftware.com\/blog\/accounting\/revenue-basics-small-business\/\"><strong>Revenue<\/strong><\/a><strong> <\/strong>to see how different revenue streams contribute to calculations<\/li>\n<li><a href=\"https:\/\/www.patriotsoftware.com\/blog\/accounting\/sales-projections-small-business-owners\/\"><strong>Sales forecasting<\/strong><\/a><strong> <\/strong>to assign different weights based on historical trends, seasonal changes, or customer demand<\/li>\n<li><strong>Cost of <\/strong><a href=\"https:\/\/www.patriotsoftware.com\/blog\/accounting\/what-is-capital-your-small-business-accounting-guide\/\"><strong>capital<\/strong><\/a><strong> <\/strong>to see your average from sources like debt and equity<\/li>\n<li><a href=\"https:\/\/www.patriotsoftware.com\/blog\/payroll\/performance-evaluations-made-easy\/\"><strong>Employee performance evaluations<\/strong><\/a><strong> <\/strong>to view a total score with different evaluation criteria weightings<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-weighted-average\">How to calculate weighted average<\/h2>\n<p>You can calculate weighted average with the weighted average formula:<\/p>\n<p><strong>Weighted Average<\/strong> = (Sum of the Products of Values and Weights) \/ Sum of All Weights<\/p>\n<p><strong>Sum of the Products of Values and Weights<\/strong> = Each Value X Assigned Weight<\/p>\n<figure class=\"wp-block-table\">\n<table class=\"has-fixed-layout\">\n<thead>\n<tr>\n<th><strong>Use Excel or Google Sheets to calculate weighted average!<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Use the SUMPRODUCT and SUM functions (<a href=\"https:\/\/support.microsoft.com\/en-us\/office\/calculate-an-average-c68b2803-c6d8-4faf-bea4-02b7c55fe768\" target=\"_blank\" rel=\"noreferrer noopener\">Excel<\/a>) or AVERAGE.WEIGHTED function (<a href=\"https:\/\/support.google.com\/docs\/answer\/9084098?hl=en\" target=\"_blank\" rel=\"noreferrer noopener\">Google Sheets<\/a>).<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p>Confused? We\u2019ll break it down for you step-by-step below.<\/p>\n<div class=\"schema-how-to wp-block-yoast-how-to-block\">\n<p class=\"schema-how-to-description\">How to calculate weighted average:<\/p>\n<ol class=\"schema-how-to-steps\">\n<li class=\"schema-how-to-step\" id=\"how-to-step-1742407945941\"><strong class=\"schema-how-to-step-name\"><strong>Multiply each number by an assigned weigh<\/strong>t<\/strong>\n<p class=\"schema-how-to-step-text\">Look at your set of numbers. Assign each number a weight.\u00a0<\/p>\n<p>You can assign percentages based on what\u2019s most important to you. For example, you can assign Product ABC a weight of 60% (0.60) and Product XYZ a weight of 40% (0.40).\u00a0<\/p>\n<p>Or, you can assign a weight as a number of units. For example, you can assign Product ABC a weight of 300 units and Product XYZ a weight of 200 units.\u00a0<\/p>\n<p>Let\u2019s say Product ABC is $50 and has an assigned weight of 60%. Multiply $50 by 0.60. Product XYZ is $25 and has an assigned weight of 40%. Multiply $25 by 0.40.<\/p>\n<\/li>\n<li class=\"schema-how-to-step\" id=\"how-to-step-1742407976081\"><strong class=\"schema-how-to-step-name\"><strong>Add all the weighted values together<\/strong><\/strong>\n<p class=\"schema-how-to-step-text\">After you multiply each number by its assigned weight, you\u2019ll get the \u201cweighted values.\u201d Add up all the weighted values together.\u00a0<\/p>\n<p>For example, Product ABC\u2019s weighted value is $30 ($50 X 0.60). Product XYZ\u2019s weighted value is $10 ($25 X 0.40). Add together $30 and $10 to get $40.<\/p>\n<\/li>\n<li class=\"schema-how-to-step\" id=\"how-to-step-1742408010539\"><strong class=\"schema-how-to-step-name\"><strong>Divide the total weighted sum by the total assigned weight value<\/strong><\/strong>\n<p class=\"schema-how-to-step-text\">Lastly, add together your weights (e.g., the decimals if you used percentages or the units if you used units). Divide your total weighted sum by the total weight value.<\/p>\n<p>For example, your total weighted sum is $40. Your total assigned weight value is 1 (0.60 + 0.40). <strong>Your weighted average is $40.<\/strong><\/p>\n<\/li>\n<\/ol>\n<\/div>\n<h2 class=\"wp-block-heading\" id=\"h-how-do-i-calculate-a-weighted-average-examples\">How do I calculate a weighted average? Examples<\/h2>\n<p>The following examples show how using the weighted average can benefit your business in three areas\u2014revenue, employee performance evaluations, and inventory.\u00a0<\/p>\n<h3 class=\"wp-block-heading\" id=\"h-1-weighted-average-for-employee-performance-evaluation-example\">1. Weighted average for employee performance evaluation example<\/h3>\n<p>Let\u2019s say you are evaluating your employee, Vanessa, for her annual performance review.\u00a0<\/p>\n<p>You take into account several factors, like work quality and punctuality. But some of these factors are more important than others. So, you need to find the weighted average.<\/p>\n<p>Here are the five factors, along with your assigned weight for each:<\/p>\n<ol class=\"wp-block-list\">\n<li>Work quality (40%)<\/li>\n<li>Productivity (35%)<\/li>\n<li>Communication (10%)<\/li>\n<li>Collaboration (10%)<\/li>\n<li>Punctuality (5%)<\/li>\n<\/ol>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"768\" src=\"https:\/\/www.patriotsoftware.com\/wp-content\/uploads\/2025\/03\/weighted-average-formula-chart.webp\" alt=\"Weighted average example of a performance evaluation.\" class=\"wp-image-74601\" srcset=\"https:\/\/www.patriotsoftware.com\/wp-content\/uploads\/2025\/03\/weighted-average-formula-chart.webp 1024w, https:\/\/www.patriotsoftware.com\/wp-content\/uploads\/2025\/03\/weighted-average-formula-chart-300x225.webp 300w, https:\/\/www.patriotsoftware.com\/wp-content\/uploads\/2025\/03\/weighted-average-formula-chart-768x576.webp 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><\/figure>\n<p>Your factors\u2019 assigned weight must total 100%.\u00a0<\/p>\n<p>Next, you give Vanessa a score on a scale from 0-100.\u00a0<\/p>\n<figure class=\"wp-block-table\">\n<table class=\"has-fixed-layout\">\n<thead>\n<tr>\n<th><strong>Evaluation Factors<\/strong><\/th>\n<th><strong>Assigned Weight\u00a0<\/strong><\/th>\n<th><strong>Vanessa\u2019s Scores<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Work quality<\/td>\n<td>40% (0.40)<\/td>\n<td>90<\/td>\n<\/tr>\n<tr>\n<td>Productivity<\/td>\n<td>35% (0.35)<\/td>\n<td>90<\/td>\n<\/tr>\n<tr>\n<td>Communication<\/td>\n<td>10% (0.10)<\/td>\n<td>60<\/td>\n<\/tr>\n<tr>\n<td>Collaboration<\/td>\n<td>10% (0.10)<\/td>\n<td>60<\/td>\n<\/tr>\n<tr>\n<td>Punctuality<\/td>\n<td>5% (0.05)<\/td>\n<td>40<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p>If you just found the simple average, Vanessa\u2019s evaluation looks pretty low. She\u2019d receive a 68 out of 100 [(90 + 90 + 60 + 60 + 60 + 40) \/ 5].<\/p>\n<p>But because work quality and productivity are the most important factors to your business, you need to find the weighted average.<\/p>\n<p><strong>Weighted Average =<\/strong> [(90 X 0.4) + (90 X 0.35) + (60 X 0.10) + (60 X 0.10) + (40 X 0.05)] \/ [(0.4 + 0.35 + 0.10 + 0.10 + 0.05)]<\/p>\n<p><strong>Weighted Average = <\/strong>(36 + 31.5 + 6 + 6 + 2) \/ 1<\/p>\n<p><strong>Weighted Average = <\/strong>81.5<\/p>\n<p>Vanessa\u2019s evaluation score is 81.5 out of 100 using the weighted average.\u00a0<\/p>\n<h3 class=\"wp-block-heading\" id=\"h-2-weighted-average-for-revenue-example\">2. Weighted average for revenue example<\/h3>\n<p>Let\u2019s say you have two main sources of revenue: product sales and affiliate marketing. You want to find your weighted average for your total revenue.<\/p>\n<p>Product sales contribute significantly more revenue to your business than <a href=\"https:\/\/www.patriotsoftware.com\/affiliates\/\">affiliate marketing<\/a>.\u00a0<\/p>\n<p>Take a look at the revenue for both, along with its assigned weight (aka its contribution to your total revenue):<\/p>\n<ul class=\"wp-block-list\">\n<li>Product sales: $80,000 (80%)<\/li>\n<li>Affiliate marketing: $20,000 (20%)\u00a0<\/li>\n<\/ul>\n<p><strong>Weighted Average<\/strong> = [($80,000 X 0.80) + ($20,000 X 0.20)] \/ 1<\/p>\n<p><strong>Weighted Average<\/strong> = ($64,000 + $4,000) \/ 1<\/p>\n<p><strong>Weighted Average<\/strong> = $68,000<\/p>\n<p>This weighted average of $68,000 shows you the combined impact of both product sales and affiliate marketing more realistically than a simple average. The simple average would show your average revenue is $50,000 [($80,000 + $20,000) \/ 2].<\/p>\n<h3 class=\"wp-block-heading\" id=\"h-3-weighted-average-for-inventory-example-nbsp\">3. Weighted average for inventory example\u00a0<\/h3>\n<p>Let\u2019s say you purchased the same inventory\u2014eggs\u2014in different batches and at different prices to sell at your store. You want to find your weighted average for inventory.<\/p>\n<p>Here\u2019s a breakdown of the number of egg cartons you have and the cost per carton:<\/p>\n<ul class=\"wp-block-list\">\n<li>Batch 1: 100 cartons at $3.00 per carton<\/li>\n<li>Batch 2: 150 cartons at $4.00 per carton<\/li>\n<li>Batch 3: 200 cartons at $6.00 per carton<\/li>\n<\/ul>\n<p>Your simple average shows the average cost per carton is $4.33 ($3.00 + $4.00 + $6.00). But your weighted average tells a more accurate story.<\/p>\n<p><strong>Weighted Average<\/strong> = [(100 X $3.00) + (150 X 4.00) + (200 X $6.00)] \/ (100 + 150 + 200)<\/p>\n<p><strong>Weighted Average<\/strong> = ($300 + $600 + $1,200) \/ 450<\/p>\n<p><strong>Weighted Average<\/strong> = $2,100 \/ 450<\/p>\n<p>The weighed average is $4.67.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-faqs-for-weighted-average\">FAQs for weighted average<\/h2>\n<div class=\"schema-faq wp-block-yoast-faq-block\">\n<div class=\"schema-faq-section\" id=\"faq-question-1742408283766\"><strong class=\"schema-faq-question\"><strong>How do you calculate the weighted average?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">To calculate the weighted average, multiply each number by an assigned weight, add all the weighted values together, and divide the total weighted sum by the total assigned weight value.\u00a0<\/p>\n<\/p><\/div>\n<div class=\"schema-faq-section\" id=\"faq-question-1742409329329\"><strong class=\"schema-faq-question\"><strong>What is the difference between average and weighted average?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">Average assigns the same weight to all numbers in a data set, whereas weighted average assigns different importance to some numbers.\u00a0<\/p>\n<\/p><\/div>\n<div class=\"schema-faq-section\" id=\"faq-question-1742409342447\"><strong class=\"schema-faq-question\"><strong>When do I use the weighted average vs. regular average?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">Use the weighted average if some values in the data set are more important than others. Use the simple average if all values in the data set contribute equally.\u00a0<\/p>\n<\/p><\/div>\n<div class=\"schema-faq-section\" id=\"faq-question-1742409358816\"><strong class=\"schema-faq-question\"><strong>What is the formula to calculate average?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">Average = (Sum of All Numbers) \/ (Total Number of Numbers)<\/p>\n<p>Add together the group of numbers. Then, divide by how many numbers you added together.<\/p>\n<p>For example, you want to find the average of three sets of numbers\u20145, 10, and 15.\u00a0<\/p>\n<p>Average = (5 + 10 + 15) \/ (3)<br \/>Average = 10<\/p>\n<\/p><\/div>\n<div class=\"schema-faq-section\" id=\"faq-question-1742409375473\"><strong class=\"schema-faq-question\"><strong>What is the formula to calculate weighted average?<\/strong><\/strong> <\/p>\n<p class=\"schema-faq-answer\">Weighted Average = (Sum of the Products of Values and Weights) \/ Sum of All Weights<br \/>Sum of the Products of Values and Weights = Each Value X Assigned Weight<\/p>\n<p>Let\u2019s say you sell two products at different prices. You sell <strong>Product A <\/strong>for $100, and you sell 300 units during the month. You sell <strong>Product B <\/strong>for $50, and you sell 500 units during the month.\u00a0<\/p>\n<p>Weighted Average = [($100 X 300) + ($50 X 500)] \/ (500 + 300)<br \/>Weighted Average = ($30,000 + $25,000) \/ 800<br \/>Weighted Average = $55,000 \/ 800<br \/>Weighted Average = $68.75<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<p><em>Struggling with complex calculations and disorganized records? Use Patriot\u2019s <\/em><a href=\"https:\/\/www.patriotsoftware.com\/accounting\/\"><em>accounting software for small business<\/em><\/a><em> to track expenses, generate reports, and stay tax-ready. Try it for free today!\u00a0<\/em><\/p>\n<p><span class=\"smaller-text\"><em>This is not intended as legal advice; for more information, please <a href=\"https:\/\/www.patriotsoftware.com\/about\/legal-disclaimer\/\">click here.<\/a><\/em><\/span>\n\t<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>From inventory valuation to sales forecasting, there are plenty of times you may need to calculate a weighted average in your business. And you don\u2019t have to be a mathematician to find it. Learning how to calculate weighted average is a relatively easy process.\u00a0 Skip Ahead What is a weighted average? The weighted average is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":146649,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11759],"tags":[10903,27865,13276,9414],"dealstore":[],"offerexpiration":[],"class_list":["post-146648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-average","tag-calculate","tag-operations","tag-weighted"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Calculate Weighted Average - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=146648\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Calculate Weighted Average - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"From inventory valuation to sales forecasting, there are plenty of times you may need to calculate a weighted average in your business. 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Som2ny Network","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fivemor.com\/?p=146648","og_locale":"en_US","og_type":"article","og_title":"How to Calculate Weighted Average - Som2ny Network","og_description":"From inventory valuation to sales forecasting, there are plenty of times you may need to calculate a weighted average in your business. And you don\u2019t have to be a mathematician to find it. Learning how to calculate weighted average is a relatively easy process.\u00a0 Skip Ahead What is a weighted average? The weighted average is [&hellip;]","og_url":"https:\/\/fivemor.com\/?p=146648","og_site_name":"Som2ny Network","article_published_time":"2025-03-20T23:46:56+00:00","og_image":[{"width":1200,"height":675,"url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/03\/how-to-calculate-weighted-average.webp.webp","type":"image\/webp"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/fivemor.com\/?p=146648#article","isPartOf":{"@id":"https:\/\/fivemor.com\/?p=146648"},"author":{"name":"admin","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371"},"headline":"How to Calculate Weighted Average","datePublished":"2025-03-20T23:46:56+00:00","mainEntityOfPage":{"@id":"https:\/\/fivemor.com\/?p=146648"},"wordCount":1166,"commentCount":0,"publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"image":{"@id":"https:\/\/fivemor.com\/?p=146648#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/03\/how-to-calculate-weighted-average.webp.webp","keywords":["Average","Calculate","Operations","Weighted"],"articleSection":["Accounting"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/fivemor.com\/?p=146648#respond"]}]},{"@type":"WebPage","@id":"https:\/\/fivemor.com\/?p=146648","url":"https:\/\/fivemor.com\/?p=146648","name":"How to Calculate Weighted Average - 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