Professional Documents
Culture Documents
Summer 2008
It is important to be able to work without the mouse in Excel Mastering this will
Increase productivity and efficiency Need proof? Check this out: http://www.dealmaven.com/products/fasttrackXL/timesavings.aspx
Menu Items
Alt: selects the menu bar Once the menu bar is highlighted, use underlined letters to navigate through the menus Example: Alt + F opens the File menu Esc: exits out of the menu bar allowing you to continue to work in the spreadsheet
Keystroke Shortcuts
A shortcut is a series of keys that allows you to perform a specific function without using the menu bar When a specific menu bar is open, the shortcuts are listed on the right Ctrl + Letter Example: to open a new workbook, select either: Alt + F + N Ctrl N
Dialog Box
Some menu items contain a dialog box Cycle through the pages using either the arrow keys or Ctrl + Tab
Use Alt + Underlined letter to enter a selection on a page You can also use Tab to maneuver through a page
After selecting items, press Enter to save and close or Ctrl + Tab to move to another page Esc will escape the dialogue box without saving any changes
To make changes to the font: Alt + O + E Use the Ctrl + Tab to move across the pages to the Font page Press Alt + Underlined letter to make changes, or use Tab to cycle through the options on the page
Changing Applications
Use Alt + Tab It is helpful to have windows cycle through only open applications as opposed to all open files
To do this, select Alt + T + O, then go to the View page and disable the setting for Windows in Taskbar (Alt + W) Now Alt + Tab will cycle through all open applications and not each open workbook
Copy
Copies existing cells and pastes a duplicate of the copied cells in another area of your worksheet Leaves original cells in place, as well as any equations that referenced those formulas To use copy:
Cut
Removes a group of cells and places them in another area of your worksheet, all equations that referenced cut formulas update to the new location of the cells To use cut:
Original Formula
Copy (Ctrl C, enter) Notice the original sum is still in cell A7, and the copied cells no longer reference the original cells
Includes formatting and calculations Undo can undo a series of the last several actions of both formatting and calculations Alt + E + U or Ctrl Z
Includes formatting and calculations Redo can redo a series of the last several undone actions of both formatting and calculations Alt + E + R or Ctrl Y
Using Go To
To open the Go To dialog box, use F5 Example: Enter B138 in the Reference: text field to locate cell B138. F5 & Enter to return
Working in a Spreadsheet
Hold Shift and use the arrow keys to select a range of cells
Ctrl + Shift + arrow keys will select an entire contiguous groups of cells
F2 allows you to edit a formula There are two different modes for editing formulas:
Editing a formula
Edit mode: Using the arrow keys will move the cursor in the formula bar to allow for direct editing of the formula (arrow keys control the formula bar) Enter mode: Using the arrow keys will select additional cells for the formula (arrow keys control movement in the spreadsheet) Use F2 to toggle between these two modes
Be aware of the difference between delete and shift rows up Deleting erases the value or function in the selected cell, leaving others around it untouched
Shifting rows up moves the values below the selected cell up a row
Shifting cells of rows up is not a modeling best practice as it will incorrectly alter the alignment of your data
Deleting the cell erases only the value in the selected cell.
Shifting cells up moves the 5.2 (2006s prepaid expenses) into the inventory position. This is incorrect!
When a cell is copied, both the formula and formatting for that cell are copied Paste
Alt + E + P, or Ctrl P
Paste Special
To use:
Tip Paste special is a big time saver for formatting a spreadsheet, once you have a few rows formatted, you can paste that formatting down the page without worrying about formulas
A relative cell reference tells Excel that the cell used in a formula depends on the location of that formula
A complete absolute cell reference tells Excel the exact cell that will always be used (locked) in the formula regardless of the location of that formula
A partial absolute reference tells Excel that only part of the reference (either the row or column) is locked
When the formula is copied across, B4 will remain locked while C4 will update with each new column as the formula is copied
Relative References
Relative References
Default Excel reference Allows formulas to be copied while updating cell references D4 and E9 are relative references As you can see, they change to E5 and F10 when the formula is copied right and down
In this example:
The column has increased by one (from D to E and E to F) The row has increased by one (from 4 to 5 and 9 to 10)
Absolute References
Absolute References
Allows cell references to be locked and thus not updated when formulas are copied Rows, columns or both can be locked by use of dollar sign ($) Examples
Lock Column: $A1 Lock Row: A$1 Lock Row and Column: $A$1
In this example:
Each cell in the row depends on the income tax rate of 38% (C19)
Thus, column C of cell C19 is locked ($C19) to prevent it from changing when copied across the row However, D18 should change with each year, therefore it remains unlocked
A times table can be created with a single formula copied down and across. In this example:
Row 2 values need to be locked (C$2) Column B valued need to be locked ($B3)
Incorrect
Correct
After inputting data, use an operator to solve an equation Excel recognizes +, -, *, / Begin all equations with an = sign
Select any necessary cells to complete the equation Press enter after completing the equation to return the result
The formula can be entered into either the active cell or the formula bar
Next, select the cell to be included in the equation Type the operator of your choice
Text in a function is always place in quotations Syntax in brackets [ ] is optional and can be left out without effecting the function
Excel functions make it easier to do many essential tasks such as summing or calculating the average, maximum, or minimum value from a set of data Functions can either be entered in the formula bar or active cell Excel will provide the syntax below the formula bar Always begin a formula with =, followed by the name of the function Enclose the contents of the function with ()
Example: =sum(B2:B4) for a sum function
By selecting OK after the analysis, you are telling Excel to accept the changes made by goal seek and change your original spreadsheet By selecting Cancel after the analysis, you are telling Excel to reject the changes made by goal seek and leave your original spreadsheet unaltered
Use when the desired result of a single formula is known, but the input value needed to determine the formula result is unknown Alt + T + G
In this Example:
Left: shows the original interest rate and payment A goal seek was performed to determine the interest rate required for a monthly payment of $2000 Right: Goal seek has found that an interest rate of 7.02% would be required
Notice that goal seek changed the values of the interest rate and payment. Selecting OK will save these changes will Cancel will return the original values
Inserting copied rows allows for easy copying of formats, row headers, etc. Shift + Spacebar along with the arrow keys to select rows to be copied Ctrl + C to copy cells Select portion of your worksheet where the copied rows will be inserted Alt + I + E to insert copied rows
Named Ranges
Excel allows a cell or a group of cells to be named This makes referencing cells in formulas easy
Especially if you find yourself often referencing the same cell Example: By naming cell B3 ir, you can type ir (no quotations) into any formula that uses that interest rate instead of typing B3
Alt + I + N + D
Warning If a worksheet containing a named cell is duped, then multiple cells will contain the same name throughout the workbook.
What happens when you have named a cell and forget where it is? F5 will allow you to see all named cells and it will take you to their locations on the spreadsheet. Use Tab and the arrow keys to move between different cells or type in a cell reference directly
Ex: Cell B2 was named rate. F5 brings up the names of all named cells and will take you to B2 if rate is selected.
Color Coding
Makes it easier to read a model and discern formulas from inputs: Formulas: Black
Example: =B2+C9 Example: =3.14159 Contains both an input and cell reference
Inputs: Blue
Example: =3.14*C2 It would be better to input the 3.14 into a cell and reference it in the multiplication formula
Formatting Cells
Alt + O + E
Font page: change the font type, style, size, or color Format page: specify the formatting of characters in a cell as either text or a number
Number formats will truncate 0s Add specific formats (i.e. currency, percentage, time, accounting)
Patterns tab: shade a cell Bold: Ctrl + B Underline: Ctrl + U Italicize: Ctrl + I
Helpful shortcuts:
Custom Number Formats allow formatting outside of those bundled with Excel Alt + O + E, then go to the Number page
Hit Alt + C and select Custom from the bottom of the list
Syntax: Yes;ERROR;No;ERROR Returns Yes for any positive number, No for zero and ERROR for any negative number or text
Using Indents
Indenting enhances readability One way to indent is to add spaces before the text
Example: Cash However, if you reference this cell, you will be forced to include the indenting
To use indenting:
Alt + O + E and go the Alignment page Alt + H to choose left or right indent Alt + I to change the indent number according to the severity of the indent
Using an indent formats the cell as opposed to having the indent be a part of the text
Conditional Formatting
Allows for formatting cells based on certain criteria Select Alt + O + D to bring up the dialog box Use the drop down menus to input commands Alt + F to create the format Example: To format negative numbers as red and positive numbers as green, highlight cells and apply the formatting shown on the right
OFFSET Function
Returns a cell value that is a specified number of rows and columns from a particular cell The value returned can be a single cell or a range of cells Syntax: =OFFSET(reference,rows, columns,[height],[width])
Offset will then move the specified number of columns and rows from the reference
In this example, Excel will move 2 rows down (E7) and 0 columns across
By changing the number in cell C3 from 2 to 1, the values in cells E10:H10 will change accordingly to 10%
Rows can be grouped (as done with rows 8 and 9) and hidden (indicated by the + sign to the left of row 10) so that only the growth rate that corresponds with the active case will be visible. This concept will be further demonstrated in the modeling section.
As we said, named cells can be used in formulas Lets try naming the reference cell in our OFFSET function to illustrate this
F5 allows you to see all of the named cells and ranges in your worksheet
Functions that allow you to look up values in a table of data Required syntax
Lookup_value: value to be found in the first row (HLOOKUP) or column (VLOOKUP) of the table
Can be a value, a reference, or a text string Reference either a range of cells or a range name
Row_index_num: row number in table_array from which the matching value will be returned
Used in an HLOOKUP A row_index_num of 1 returns the first row value in table_array, a row_index_num of 2 returns the second row value in table_array, etc.
Col_index_num: column number in table_array from which the matching value must be returned.
Used in a VLOOKUP A col_index_num of 1 returns the first column value in table_array, a col_index_num of 2 returns the second column value in table_array, etc.
Optional Syntax
Range_lookup: logical value that specifies whether you want LOOKUP to find an exact match or an approximate match.
Optional syntax for both HLOOKUPs and VLOOKUPs If TRUE or omitted, an approximate match is returned. If FALSE, HLOOKUP will find an exact match. If one is not found, the error value #N/A is returned.
VLOOKUP
Searches for a value in the first column of a table and returns a value in the same row from another column in the table The V in VLOOKUP stands for vertical
HLOOKUP
Searches for a value in the top row of a table and returns a value in that same column from a row you specify in the table The H in HLOOKUP stands for horizontal
A1 Reference style:
Excels default style, which refers to columns with letters and refers to rows with numbers (row and column headings) For example, B2 refers to the cell at the intersection of column B and row 2
Useful for computing row and column positions in macros (MUST TURN THIS FEATURE ON) Tools Options General Excel indicates the location of a cell with an "R" followed by a row number and a "C" followed by a column number.
= INDIRECT(ref_text,a1)
Use INDIRECT when you want to change the reference to a cell within a formula without changing the formula itself
Note: Cell B5 is named Payment The formula in C5 returns 122. =Indirect(A5) tells excel to look to A5 for instructions. A5 says Payment directing Excel to return the value of the cell named Payment which is B5.
Avoid Merging
Merging cells can make it hard to copy, insert, or delete cells A better approach is to format the cells using Center Across Selection
This method allows text to be centered over the range of cells without merging
Spacer columns used to separate underlined adjacent cells hurt the ability to fluidly copy formulas across A better approach is to format the adjacent cells to Center Across Selection (prior slide) and then apply a Single Accounting Underline from the Underline drop box on the Font page
Dont do this!
This achieves a similar format as borders & spacer columns without the mess
Save
Alt + F + S
Save As
Saves the file under a different name creating two identical documents with different names
This is beneficial because a file can be altered without changing the original file (i.e. using a template)
Alt + F + A
The page tab allows you to choose the print layout of your worksheet
A good way to setup your page is to scale the page to fit 1 page wide while not specifying how many pages tall This will ensure that your printed model does not run off the side of the page To scale your workbook, select Alt + F + U, go to the page titled Page and select Alt + F for Fit to: and specify 1 page(s) wide, while not inputting a value for page(s) tall
The Sheet tab allows you to choose print properties such as the appearance of gridlines or to repeat row and column headings at the top of each page
The Header/Footer tab is located in the Page Setup menu and contains a feature called Custom Header which allows for additional options
Print Area
Allows you to specify the area you wish to fit on a single page Highlight the desired cells Alt + T + S will set the print area Alt + T + C will clear the area you have previously set
Alt + F + V Allows you to view your document exactly as it will be printed Alt + F + P to print Here, you may choose:
Number of copies Which pages you would like printed The order in which your worksheets will be printed The printer you wish to use
Full Menus
The following are several options to gear Excel more towards power users Enable Full Menus
Forces Excel to show full menus Alt + T + C Check Always show full menus
Alt + N
Unless you are conducting heavy data entry, it is helpful to turn off move selection after entry Turning off this feature will keep Excel in the same active cell after pressing Enter when writing formulas (instead of moving down a row) To do this:
Editing Options
Editing in the formula bar instead of the cell can make formula writing easier To do this you need to disable the Edit directly in cell feature Alt + T + O then go to the Edit page Hit Alt + E to disable Edit directly in cell Only allows formula editing in the Formula bar This is beneficial when creating long formulas
When long formulas are being edited in the cell directly, the formula has the tendency to spill over onto other cells in the worksheet making it difficult to see those cells and reference them in the formula
Triggers
Triggers are used to give greater flexibility to a model by allowing the user to determine whether or not a formula should calculate
Triggers can used to determine whether or not entire formulas or just component pieces of formulas should calculate IF statement Multiply by 0 or 1
Use an IF statement to determine whether or not the formula (or component of the formula) should calculate Example
In the example below, anytime the text yes is in cell B2, the $5 of Target will be added to the $10 of Acquirer Otherwise, the formula will only show the $10 of Acquirer
Note that the IF statement if effective, but not the most robust method for formula writing
Example: Someone could type Y or Yeah meaning yes and Excel would still evaluate the statement to not include the $5 of Target
Trigger
Result: 15
Trigger
When the trigger is 1 it will multiply 1*B5, which will include B5 in the calculation When the trigger is set to 0 will multiply 0*B5, and it will therefore drop out of the calculation without effecting any other part of the calculation In this example, when B2=1 the result is 15, when B2=0 the result is 10
Tip Notice in the picture below that cell B2 still contains the number 1, but the text yes is displayed. This is a custom number format explained in the following slide.
Custom Number Formats allow for formats outside of those bundled with Excel Alt + O + E, on the Number page, the last option under Category (Alt + C) The syntax is: POS;NEG;ZERO;TEXT
Not all arguments are required when creating a custom format Check Excels Help for more syntax notes Syntax: Yes;ERROR;No;ERROR Returns Yes for any positive number, No for zero and ERROR for any negative number or text
Understanding Errors
#NAME?
Using a name that does not exist Misspelling a name Misspelling the name of a function Entering text in a formula without enclosing the text in double quotations (text) Omitting a colon (:) in a range reference Referencing another sheet not enclosed in single quotations (sheet)
#DIV/0
Example =5/0
Using a cell reference to a blank cell of a cell that contains zero as a divisor
#REF
Deleting cells referred to by other formulas Pasting moved cells over cells referred to by other formulas Using a link to a program that is not running
#VALUE
Entering text when the formula requires a number or logical value (true/false) Supplying a range to an operator or a function that requires a single value, not a range Entering a cell reference, formula, or function as an array constant
Tip Excels Help feature can provide assistance in troubleshooting additional errors. Simply type the specific error in the search bar.
ISERROR
The ISERROR formula tests if A2 contains an error value. If it does, the IF statement tells excel to return N/A to improve the worksheets clarity. If not, the IF statement tells excel to return the value of A2.
If you cut another cell (Ctrl x) and paste it over cell E3, then any cells that use E3 in their own formulas will now have a #REF! error. The same thing happens if you highlight row 3 and run Edit Delete.
If you are considering deleting a row or group of rows, it can be difficult to know ahead of time whether there are important cells in it. You can run Tools Formula Auditing Trace Dependents, but you need to do this one cell at a time!
Note: There are more details about tracing dependents in the Menu Items slide deck
What if there are tons of #REF errors on your worksheet? How do you fix them?
The key is to identify the root source of the #REF! state. Do a Find (Ctrl + F) using the settings shown below, searching within formulas instead of values for #REF. This will take you to the cells that had relied on the section you obliterated. All you need to do is fix the cell or row which has caused the problems, and your entire worksheet will be restored!
Circular References
Circular References occur when a formula refers, either directly or indirectly, back to its own cell The text Circular or Calculate will be displayed in the status bar if a circ is present Close all other files to narrow down the circ to a certain workbook Use the Circular Reference Toolbar to resolve the circ
Notice how A30 is an input to cell A30, causing a circular reference. Use the Trace Precedents function to locate all inputs. Also notice the text Circular: A30 in the status bar indicating the circ
Iteration
By turning Iteration on, Excel will attempt to solve for any circs in the spreadsheet. When modeling, it is best to operate with Iteration turned off until the model is finished. Alt + T + O + C
Tracing errors shows the cells referenced by the cell that contains an error. In this case, division by zero occurred.
Provides the ability to track which cells feed a certain cell Ctrl + [ to highlight precedent cells
Precedent
Function Precedent
Hit Tab to cycle through each precedent In the example below, A1, B2, and B3 are precedents of B5
Example
Original equation
Tracing dependents provides the ability to track which cells reference a certain cell Use Ctrl + ] to highlight the dependent cells
Note: when tracing precedents and dependents Excel will only highlight and cycle through cells on the active worksheet
Grouping rows and columns is a superior alternative to hiding rows and columns
It makes visible the fact that rows and columns are indeed hidden
Highlight rows or columns that need hidden Alt + Shift + left/right arrows will group and ungroup rows Alt + Shift + up/down arrows will group and ungroup columns
Select a cell in the range to be hidden and hit Alt + D + G + H Select the first cell in the range that is hidden and hit Alt + D + G + S
Notice in the example that column A and rows 5-10 are now hidden
Sorting Data
Note If the data range you selected includes the header row (the column headings in this example) be sure to relay that to Excel by checking the Header Row option under My data range has
PivotTables
A PivotTable report is an interactive table that quickly combines and compares large amounts of data What it does:
Rotates rows and columns to see different summaries of the source data Displays the details for areas of interest
To analyze related totals, especially if there is a long list of figures to sum To compare several facts about each figure
PivotTables Cont.
Select your data and hit Alt + D + P Select PivotChart report (Alt + r) and hit Finish (Alt + F)
By choosing a PivotChart report instead of just a PivotTable Excel will not only create the PivotTable, Excel will also add a chart and sheet to your workbook to better display all your data
PivotTables Cont.
Choose your layout by deciding where to place each data range Drag and drop the data boxes into the proper fields on the chart
The Data rectangle is for quantitative data that should be summed The Column and Row rectangles are used to organize qualitative data
PivotTable Example
NewCo has 4 divisions (1,2,3,4) and up to 4 products per division (A,B,C,D) A PivotTable can show the revenues for NewCo broken down by any division (or combination of divisions) and any product (or combination of products)
Notice the table is dynamic: By using the drop down arrows the table will instantly update to display revenues for the any combination of division and product
Creating a data table is simple with Excels Data Table feature It is especially useful for creating a sensitivity analysis Example:
In this example, we will be creating a sensitivity table to test how different growth rates and interest rates effect the value of a growing perpetuity. First solve for the value of perpetuity by dividing the cash flow by the difference between the interest rate and growth rate.
Your calculated value MUST be linked to the top left-most corner of the table
Note that the 12% and 4% in the headings of this table MUST be hardwired (input) values for the table to work
If you reference other cells for those values (such as B4 and B5), the data table will not work correctly. In effect, you created a circular reference that Excel cannot solve. The growth rate (4%) and interest rate (12%) used to calculate the original value of perpetuity should be the middle numbers in the table setup
The other percents (5%, 3%, 10%, 14%) may be hardwired or calculated
Be sure to include the row and column that contain your inputs
The center value of the table should always match the original value
Alt + D + T
The intersection of this point is the original data (in this example 12,500 is found by using the rates 4% and 12%) It is a good idea to implement a check Take the absolute value of the difference between the middle value of the table and the original value Example: =abs(D11-B6)
Tip You may wish to custom format the 12,500 to display text such as valuation
Data tables take time to calculate because Excel is creating and running the model several times behind the scenes to create the data table
If your model has several tables, it is a good idea to operate with calculation set to Automatic except tables until the model is finished (Alt + T + O) Creating a check serves as a reminder to recalculate before printing (F9) Setting calculation to automatic except tables (not manual) is still an acceptable modeling practice as long as you have created the check
Data Validation
Data Validation places constraints on the types of data that can be entered into a cell Data can be constrained to ranges of values with the following characteristics:
Alt + D + L
One of the most common applications of Data Validation is inserting a list box into a cell Select the desired cell and hit Alt + D + L Choose List from the Allow box and type the desired items of the list in the Source box, each separated by a comma
Alternatively, you can also use inputs from the model in the Source box by entering the cell reference
In this example: only values 1,2, or 3 may be entered into the cell
Split Window
Splitting the screen allows you to see different areas of the same worksheet To bisect the screen:
Place the cursor in the leftmost cell of the row where you want to split the screen Alt + W + S to split the screen Alt + W + S again to close split screen mode
Freeze Pane
Freezing the window pane prohibits scrolling This tool is sometimes used to freeze column headers so that as you scroll through a long list of data, you can still see the headings Alt + W + F
The active cell designates where the window will freeze To freeze a row of headings, make the active cell column A of the row just below the heading
Because A2 was selected before freezing, row 1 is frozen Even as you scroll down the spreadsheet, these headings are still visible, notice that the data has been scrolled to row 16
Arrange Windows
Arranging the windows is a quick and easy way to see all open workbooks Different options for arranging windows include cascading, tiling, or vertically/horizontally aligning open windows You can also choose whether you want all open workbooks arranged or only the windows of the active workbook Alt + W + A
Function Wizard
Excels function wizard allows you to search for a function and then receive an explanation of how to use that function
Alt + I + F
Type a brief description of the task in mind in the Search for a function box You may also select a category and browse the functions listed After selecting a function, the wizard explicitly describes each piece of the argument
This is a link to Excel Help which will provide greater detail and explanation of the function
Recall that each equation must begin with = The function name must follow
Ex: =SUM Be sure that all parentheses are closed, this becomes especially important when writing complex formulas with multiple functions To use individual cells, separate the cell references with a comma
Example: =sum(A2,A3,A4) tells Excel to sum A2, A3, and A4 Example: =sum(A2:A4) tells Excel to sum all cells in column A rows 2 through 4
To select both a region of cells and individual cells a combination of a colon and a comma can be used
Example: A2:C2,A6 tells Excel to sum all cells in row 2 columns A through C AND cell A6
Below is a formula which we will later visit; however, the principles remain constant for all functions When typing a formula into Excel, Excel displays the components of the formula
The piece of the formula that you are currently entering will be bolded
Ex: rate
The necessary punctuation will be displayed (commas, parentheses, colons, etc.) The pieces shown in [brackets] are optional
If values are not entered in their places, they will assume a default which can be found in the help menu Bracketed items offer additional properties/restrictions to the formula
If you move the cursor over the name of the function, you can link to the help menu to get specific detailed instructions on using the function
Function Wizard
Recall that each equation must begin with = The function name must follow
Ex: =SUM Be sure that all parentheses are closed, this becomes especially important when writing complex formulas with multiple functions
To use individual cells, separate the cell references with a comma Example: =sum(A2,A3,A4) tells Excel to sum A2, A3, and A4 To select a contiguous region of cells, use a colon Example: =sum(A2:A4) tells Excel to sum all cells in column A rows 2 through 4 To select both a region of cells and individual cells a combination of a colon and a comma can be used
When typing a formula into Excel, Excel displays the components of the formula
The piece of the formula that you are currently entering will be bolded Ex: rate
The necessary punctuation will be displayed (commas, parentheses, colons, etc.) The pieces shown in [brackets] are optional If you move the cursor over the name of the function, you can link to the help menu to get specific detailed instructions on using the function
=AVERAGE(value:value)
Returns the average of a group of numbers Values can be either a range of numbers, individual numbers, or a combination of both
=COUNT(value:value)
=COUNTA(value:value)
=MAX(value,value)
=MIN(value,value)
Using MIN
Using MAX
Use MAX to constrain a number above a certain level
=SUM(value:value)
Using Sumbars
Sumbars ensure that an added row at the end of a sum range will be automatically picked up by the SUM function To use a Sumbar, include one extra blank row in your SUM range
Tip It is a good idea to display something in the blank cell, such as a single space formatted with a single accounting underline 3+4+1+3 does not equal 8! Notice how summing through an extra row picks up item d on the right.
=ROUND(number,number of digits)
=ROUNDUP(number, num_digits)
ROUNDUP returns a number rounded UP to a specific number of places past the decimal
ROUNDDOWN returns a number rounded DOWN to a specific number of places past the decimal
=ABS(number)
=SQRT(number)
Logic Functions
Logic functions are used to test whether a value or set of values is =, >, or < another value or set of values (logical test) There are 3 main types of logic functions: AND, OR, and IF AND functions test whether all arguments are true OR functions test whether any arguments are true Both AND and OR functions return either TRUE or FALSE as the formula result IF functions also conduct a logical test, but they return a specified statement based on whether the test is true or false
AND vs. OR
AND
=AND(logical test 1, logical test 2, ) The formula will return TRUE only if all logical tests are true, otherwise it will return FALSE
=OR(logical test 1, logical test 2, ) The formula will return TRUE if any of the tests are true It will only return FALSE if all the logical tests are false
OR
Syntax for OR
To make the value a formula, use normal formula syntax (without an additional =) To make the value text, set the text off with quotation marks
=NOT(logical)
Reverses the result of a logical test Use NOT when you want to make sure a value is not equal to one particular value The NOT function will become more valuable with more complex formulas
IS Functions
Used for testing the type of value or reference Checks the type of value and returns TRUE or FALSE depending on the outcome Syntax:
= ISBLANK(value) ISERR(value) ISERROR(value) ISLOGICAL(value) ISNA(value) ISNONTEXT(value) ISNUMBER(value) ISREF(value) ISTEXT(value) For example: ISERROR will test to see if a cell includes an error such as #N/A, #VALUE!, #REF!, #DIV/0!, #NUM!, #NAME?, or #NULL!
=COUNTIF(range,criteria)
Returns the amount of numbers in a given range that fit specific criteria If the criteria is either text or a logical test, it must be in quotes
=SUMIF(range,criteria)
The SUMIF function can also sum specific numbers based on criteria exhibited in a different column Syntax: For this example, Excel will sum the numbers in column C whose column B value is Product B (equivalent to B4)
Custom Number Formats allow for formats outside of those bundled with Excel Alt + O + E, on the Number page, the last option under Category (Alt + C) The syntax is: POS;NEG;ZERO;TEXT Example: Yes/No Trigger
Syntax: Yes;ERROR;No;ERROR Returns Yes for any positive number, No for zero and ERROR for any negative number or text
Nesting Functions
Formulas can be combined for complex calculations Types of functions commonly nested:
Logic Ex: =IF(AND()) Error Ex: IF(ISERROR()) Formatting Ex: ROUND(MAX()) How it works: Excel will begin by evaluating the innermost function and then work out For example, in the above formatting example Excel will first evaluate the MAX function and then round that result
Logic
The AND function first checks to see if all the arguments are true. Then, the IF function returns yes if the AND function was fulfilled and No if it was not
Statistic
The SUM function first sums actual revenue and then subtracts the sum of projected revenue. The MAX function then compares this difference with 0 and returns which ever is greater.
=FIND(find_text,within_text,start_num)
FIND locates a desired text string within a main text string It returns the number of characters from the starting position of a desired string to the first character of the main text string Find_text: the text you want to find Within_text: the main text which contains the text you want to find
Result: 19
=MID(text,start_num,num_chars)
Returns a specific number of characters from a text string, starting at the position you specify, based on the number of characters you specify
Text: the text string containing the characters you want to extract Start_num: the position of the first character you want to extract in text
Num_chars: specifies the number of characters you want MID to return from text
=LEFT(text,num_chars)
Returns the first character or characters in a text string, based on the number of characters you specify. Text: the text string that contains the characters you want to extract
Num_chars must be greater than or equal to zero If num_chars is greater than the length of text, LEFT returns all of text If num_chars is omitted, it is assumed to be 1
=LEN(text)
Text is the text whose length you want to find Spaces count as characters
Numeric values can be formatted as text using an apostrophe Text is left aligned by default Example: To format the value 2005 as text, simply enter: 2005
Notice that the leading apostrophe will not be displayed in the cell in front of 2005
Formula results can be formatted as text using the character combination &
The TEXT function has the ability to convert a numeric value into text The result from TEXT is no longer a numeric value but rather a string of text Syntax: =TEXT(value,number format) Example: TEXT(5, $0.00) results in the text $5.00
The Ampersand (&) gives the ability to mix text and links in formulas Syntax: Notice the = to indicate a formula
Text before Link: =Text&Link Text after Link: =Link&Text Link between Text: =Text&Link&Text The link can be either a cell reference or a formula containing
=The result is: &A1 =A1& is the result =I am shocked that &A1& is the result
Linked footnote markers update when the footnote number changes Use the LEFT function Syntax: =LEFT(cell,num_chars) Returns the specified left most number of characters from a designated cell Notice how the Footnote marker in A3 automatically updates when the footnote is renumbered in A6
DATE Function
Returns the sequential serial number that represents a particular date. If the cell format was General before the function was entered, the result is formatted as a date. Syntax: =DATE(year,month,day)
Year: can be one to four digits. Month: number representing the month of the year Day: number representing the day of the month
=EOMONTH(start_date, months)
Returns the end-of-month date that is a specified number of months passed start_date Example: EOMONTH(DATE(2006,1,1),12) returns 39113
39113 is the serial date that represents 1/31/2007 when formatted as a Date
EOMONTH requires that the Analysis ToolPak be activated Tools -> Add-ins -> Select Analysis ToolPak
Model Layout
Avoid laying out model pages horizontally A vertical layout has two main advantages:
The ability to use Pg. Up and Pg. Down Keeping column consistency among years
A horizontal layout hinders your ability to freely insert and delete rows
Modular Modeling
Involves splitting the portions of your model into pieces called modules Devote a worksheet to each financial statement Adds organization to the model Provides the ability to copy modules to other workbooks so that all work does not need to be created from scratch
Notice that each piece of the model is contained in its own worksheet
Column Alignment
It is always a good idea to keep columns aligned throughout the model For example, if Column E corresponds to 2008 on the Operating Assumptions, then Column E should correspond to 2008 on the Income Statement This makes it easier to trace your formulas and locate errors if, for example, you are referencing the wrong year in a formula
The inconsistency between the columns will make it hard to trace incorrect references
When working with modular models, it is not a good idea to reference multiple worksheets in a summation A better approach is to bring all values you wish to reference to the current page before summing This adds clarity to your model
Dont do this!
When summing across and down, make sure to recalculate vertical formulas (not just copy across horizontal formulas) This will help you catch errors
Example: Below, notice what happens if our LTM formula is simply copied down Column I. An error in one row would not affect the other rows and the model would seem to be correct.
There was an error calculating the LTM revenue (200) that does not effect the gross profit because the formula was copied across. 200 69.5 cannot be 36.1!
The better approach would have been to recalculate LTM gross profit by subtracting cost of sales from revenue. This would help you to catch an error such as this one.
Cumulative checks are used to obtain a grand check for an entire section of the model Example: Confirm that the Balance Sheet balances
You must ensure that Assets (A) = Liabilities (L) + Equity (E) Use =ABS((A-(L+E))) Add each years check to the following years check to arrive at a total cumulative check
Using the absolute value function will safeguard against canceling out a value in the check if there is an offsetting value in a future year
If the cumulative check is 0, then all checks must be 0, therefore the Balance Sheet is balanced
Building a system of checks into your model will ensure that you dont have any glaring errors Typical things to check for:
Balance Sheet balances and does not contain any negative numbers where negative numbers do not make sense
For example, debt should never be negative, accumulated depreciation will be negative
Ensure that sources of funds always equal uses of funds Ensure that data tables are recalculated before printing
All checks from the model should be summarized in one place on the cover page
This makes it quick and easy to check the entire model You can use an if statement to change the title of your model to ERROR if any of your checks indicate a problem