PROVIDING ACCURATE, RELIABLE AND STRAIGHT TO THE POINT KNOWLEDGE ABOUT DIFFERENT IT TOOLS EXPLAINED WITH PRACTICAL EXAMPLES

CONTENTS

EXCEL FUNCTIONS-COUPDAYS

COUPDAYS function comes under the FINANCIAL FUNCTIONS category in Excel.

COUPDAYS helps us to calculate the number of days in the coupon period that contains the settlement date. Coupon bonds are securities that pay interest at regular interval (say 1,2 or 4 times a year) before the final maturity of the bond.We use this formula to know when would the bond would start paying out.

The COUPDAYS function helps in calculating the number of days in the COUPON PERIOD , which contains the settlement date.

PURPOSE OF COUPDAYS IN EXCEL

COUPDAYS function helps in calculating the number of days in the COUPON PERIOD , which contains the settlement date.

PREREQUISITES TO LEARN COUPDAYS

THERE ARE A FEW PREREQUISITES WHICH WILL ENABLE YOU TO UNDERSTAND THIS FUNCTION IN A BETTER WAY.

  • Some information about the financial terms is an advantage for the use of such formulas. 
  • Basic understanding of how to use a formula or function.
  •  Basic understanding of rows and columns in Excel.
  •  Of course, Excel software.
Helpful links for the prerequisites mentioned above

SYNTAX: COUPDAYBS

The Syntax for the function is

=COUPDAYS(SETTLEMENT DATE, MATURITY DATE,NUMBER OF COUPON PAYMENTS (FREQUENCY) , BASIS)

SETTLEMENT DATE is the security’s settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.

MATURITY DATE   is the security’s maturity date. The maturity date is the date when the security expires.

NUMBER OF COUPON PAYMENT(FREQUENCY)   is the number of coupon payments per year. For annual payments, frequency = 1; for semiannual, frequency = 2; for quarterly, frequency = 4.

BASIS is the type of day count basis to use.

BasisDay count basis
0 or omittedUS (NASD) 30/360
1Actual/actual
2Actual/360
3Actual/365
4European 30/360

THE DATES SHOULD BE PUT USING THE DATE FUNCTION

=DATE(YYYY,MM,DD) OTHERWISE IT’LL RETURN AN ERROR.

EXAMPLE:COUPDAYS IN EXCEL

DATA SAMPLE

The settlement date for the example is 19.01.2019

Maturity date is 01.09.2019

Freq of payout is 2

and basis is 1.

 

COUPDAYS FINANCE DATE
COUPDAYS EXAMPLE

STEPS TO USE HLOOKUP

The data is put in the cells from F9 TO F14.
For the result
we put the formula in F14 as

=COUPDAYBS(F9,F10,F11,F12)

The result comes out to be 181.

CONFUSION CLARIFICATIONS

NUMBER OF DAYS CALCULATION

We should always be having knowledge about the working of a function. Otherwise we may be stuck in a situation where we never know whether the answer is correct or not.

These formulas are doing nothing but playing with the dates.

MS Excel is converting the date to a number first. Number is the number of days after JAN 1 1900.

After converting to number it subtracts to find out the number of days between any two dates.

The same procedure is being followed up in these financial formulas.

These can be done with the simple calculations also but when we have a ready function, we can always take help.

 

DAYS IN COUPON PERIOD CONTAINING SETTLEMENT DATE

It tells us about the days in the period for which the payment will be made. It means when payout is once a year, it’ll be like 365 days,

twice a year, 181 days or 180 as per the BASIS,

four times a year, 90 or 91 as per BASIS.

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