What this answers
This calculator answers "how strongly, and in which direction, are these two binary variables associated?" for a table with exactly 2 rows and 2 columns, giving a single signed number similar in spirit to a Pearson correlation coefficient.
How it is calculated
Phi is the square root of the table's chi-square statistic divided by the total count, with its sign taken from whether the diagonal cells (a and d) outweigh the off-diagonal cells (b and c) or vice versa. For a 2 by 2 table specifically, phi is mathematically equivalent to the Pearson correlation you would get from coding both variables 0/1 and correlating them directly, though phi is computed here straight from the chi-square relationship rather than by that route.
Worked example
For a table with 10 and 0 in the first row and 0 and 10 in the second row, a perfectly clean diagonal pattern, phi comes out to exactly 1, indicating a perfect positive association: knowing the row perfectly predicts the column. Reversing the diagonal pattern would give phi equal to exactly negative 1 instead.
Assumption audit
What this result does not mean
Phi measures association strength and direction, not causation, and it is only valid for a 2 by 2 table specifically; a larger contingency table needs the Cramer's V Calculator instead, which generalizes the same underlying idea to any table size but drops the signed direction, since direction is not a well-defined concept beyond 2 categories per variable.
Limitations
Like any measure derived from chi-square, phi can be affected by very small or sparse cell counts; check that no cell is implausibly small before treating a phi value as a stable estimate of association strength.