The Excel MAX function is the antithesis of the MIN function, it returns the largest numerical value in a range of cells. Similarly, to the MIN function, the formula ignores cells containing empty cells, text values and logical values True or False. In today’s post, we would take you through all you need to know about the MIN function and how you can apply it in a real-life modeling situation. Let’s begin, shall we:
Syntax & Argument
The syntax for the Excel Max function is:
=MAX(number1, [number 2], …)
The arguments of the MAX function are the hardcoded numerical values or cells containing numerical values within the formula. Like the MIN function, the arguments are limited to 255 characters, however each argument (represented by “number 1”, “number 2″….) can refer to a range of cells rather than just a single cell, thereby increasing the capacity of the formula.
Let’s see some examples of this function at work below:
MAX Function Examples
The MAX function would return the largest value from a group of hardcoded numbers, cells containing numbers or a combination of both.
When used on a range, it returns the largest value within the range
The MAX function can be used on a mix of hardcoded numbers and cell referenced arguments
Practical Use of MAX Function in Financial Modeling
Imagine that you are preparing your personal income tax filing, and there is a personal allowance clause that states that your consolidated relief allowance is the higher of US$20,000 or 1% of consolidated gross income. As a businessman with varying income, you may need to implement a formula in your tax planning model to ensure that you capture the right amount of relief.
From the above, you would see that the personal allowance is not fixed and is solely dependent on the consolidated Gross Income of the individual during the taxable year. We wouldnt want to be manually adjusting the personal allowance, would we? Of course not, to ensure we don’t, we only need to apply a simple MAX function to the Personal Allowance section.
Note: There is a negative sign (-) Infront of the MAX function because we need to deduct our personal allowance from the Consolidated Gross Income to arrive at our Taxable Income for the period.
