The differential expression algorithm
The Differential Expression for Single Cell tool performs Mann-Whitney U tests (also known as Wilcoxon rank-sum tests) for each feature. If data is not normalized using the Normalize Single Cell Data tool (see Normalize Single Cell Data), the raw expression data is used. In this situation, results should be interpreted with caution, as differences could be solely driven by library size and other sample preparation specific factors.
When the data is normalized using the Normalize Single Cell Data tool, the Pearson residuals (see The Normalize Single Cell Data algorithm) are used for performing the Mann-Whitney U tests. The residuals are however difficult to interpret, and therefor the `Fold change' and `Max group mean' are calculated using the estimated expression values if all cells had approximately reads.