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DOLLARDE Function

The DOLLARDE function in Excel converts a price expressed as a fraction into its equivalent decimal value. It is commonly used in financial analysis, especially in scenarios involving prices of securities expressed in fractional format (e.g., stock quotes).

Key Features of DOLLARDE:

  • Converts fractional notation (commonly used in finance) into decimal notation.
  • Useful for working with prices where the fractional part doesn't correspond to standard decimal values (e.g., quarters, eighths, or sixteenths).

Syntax:

DOLLARDE(fractional_number, fraction)

Arguments:

  • fractional_number: The number to convert from fractional to decimal format.
    • The integer part represents the whole number portion.
    • The fractional part represents the numerator of the fraction based on the given fraction.
  • fraction: The denominator used for the fraction. It must be greater than 0.

How It Works:

  1. The function interprets the fractional_number based on the given fraction to calculate the decimal value.
  2. For example, a fractional stock price of 1.08 (with a denominator 8) is interpreted as:
    • Whole part: 1
    • Fractional: 8 ÷ 8 = 1
    • Result: 1.0 + (8/8) = 1.125.

Examples:

1. Converting Fractional to Decimal:

=DOLLARDE(1.08, 8)

Result: 1.125

This converts the fractional value 1.08 (1 and 8/8) into its decimal equivalent, 1.125.

2. Using Sixteenths for Conversion:

=DOLLARDE(3.04, 16)

Result: 3.25

This converts the fractional value 3.04 (3 and 4/16) into its decimal equivalent, 3.25.

3. Handling a Custom Denominator:

=DOLLARDE(10.03, 12)

Result: 10.25

This converts the fractional value 10.03 (10 and 3/12) into its decimal equivalent, 10.25.

Notes:

  • If fraction is less than or equal to 0, the function returns a #NUM! error.
  • If the fractional_number contains invalid characters or is improperly formatted, the function returns a #VALUE! error.
  • In financial contexts, ensure that the denominator of the fraction matches the base of the fractional notation (e.g., 8 for eighths, 16 for sixteenths).

Applications:

  • Stock Price Conversions: Often used by financial analysts to interpret and process stock prices quoted in fractional notations.
  • Bond Markets: Useful for converting quoted bond prices from fractional to decimal formats.
  • Investment Calculations: Simplifies computations requiring decimal values instead of fractions.

Tip: Use DOLLARDE in conjunction with DOLLARFR if you need to toggle between fractional and decimal formats in financial calculations. For example, fractional prices can be decoded into decimals for easier arithmetic operations.