CHAPTER – 02

SPREADSHEETS - PART I: FUNDAMENTALS

Learning Outcomes

After studying this chapter, you should be able to:

- Understand the uses of spreadsheets in organizational context.
- Explain basic elements of a spreadsheet.
- Perform basic operations in a spreadsheet using Excel.
- Construct a formula by using built-in functions.
- Apply decision logics in in Excel to compute conditional outputs.
- Compute financial information using basic and advanced financial functions in
Excel.
- Apply statistical tools to perform basic statistical analysis.
- Organizing and analyzing data
- Create charts using excel and identify the type of chart best suited for a specific
analytical situation
- Prepare Data tables, Sort and filter data and Data validation
- Prepare a worksheet properly for printing.

2.1 Introduction

Spreadsheet application is one of the most commonly used software packages in any
organizational setting. Its ability to tabulate data and perform various functions, such as
summation, average, conditional operations (“IF,”ELSE”), and basic statistics, in obtaining
different information, has brought the popularity it possesses. These include preparations of
budgets, schedules, resource allocations, sales record maintenance & analysis, payroll, and
simple accounting systems.

Daniel Bricklin, a student of Harvard Business School, populated the idea of spreadsheet in
1978 with his software VisiCalc for Apple computers (Power). The term ‘Spreadsheet’ was
adopted from the magazines and newspapers in which ‘Spread’ was referred to a set of
pages placed in juxtaposition to make the contents flow from one to the other as if it was a
single page. Originally, Bricklin wanted to develop an application where calculations were
visible in a tabulated manner and later took off in the form of spreadsheet applications. Few
years later, IBM introduced Lotus 1-2-3 as a fully-fledged spreadsheet application with many
additional features like graphs, addressable cells, and macro programming capabilities.

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Thus, it was known as data presentation application. During the mid-1980’s computers were
literally purchased for running Lotus 1-2-3. However, with the release of Windows 3.1
operating system and Microsoft Excel, the popularity began to shift to Excel since mid-90’s.

This chapter will introduce basic functions of Microsoft Excel (hereafter Excel) and how to
use them in the context of accounting. Despite availability of many FOSS spreadsheet
applications such as WPS Spreadsheet by Kingsoft, Google Sheet, and OpenOffice Calc,
Excel was chosen as the application to demonstrate the spreadsheet functions in this
chapter. As mentioned previously, Excel is not a free software and the students are required
to obtain a valid end-user license for practicing the contents in this chapter. The
demonstrations of this chapter were done using a licensed copy of Microsoft Office 2016.

2.2 Getting started

Just like the other application software in Office
Package, Excel too can be started in multiple ways. The
easiest way to do it is to use the desktop icon if the
system has added one at the time of installation.

There are many ways to start the Excel Application (see

Figure 2-1);
Figure 2-1: Starting Excel
→ Click on (Windows Start icon) and look for
the Microsoft Office package. Then click on Excel icon.
→ Click on (Search icon) and type “Excel.” Then click on the Excel icon that appears
on the start menu.
→ If your computer has a desktop icon of Excel, double click on (Excel icon).

Excel should start provided that it has been properly installed and no error is encountered.
The start page is similar to that of the other office applications except for the templates
specific for spreadsheets.

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 Search bar Sign in user

Spreadsheet template

Recent spreadsheet pane

Figure 2-2: Excel Start Page

2.3 Why spreadsheets?

As mentioned before, there are numerous reasons for using spreadsheet applications in an
organization. The following are some of the common uses.

- Accurate calculations
Excel provides a variety of mathematical functions that perform any calculation
accurately. One of the main reasons for using spreadsheet over a calculator or a
billing machine is that none of them provides the flexibility and free from errors.
However, when performing calculations on data that are already entered into a
spreadsheet it will not only remove the insertion and omission errors, but also display
the data that the calculations are performed on. This enables flexibility by changing
any data and getting the results at the same time.

- Conditional operations
Excel is also equipped with conditional functions, such as IF, SUMIF, COUNTIF etc.
that can be used to extract information based on varying conditions and perhaps to
perform some calculations on such extracted information. Further, this enables
managers to carryout scenario analysis by investigating scenarios defined by
different conditions and their subsequent effects on the bottom line.

- As a planning tool
Top as well as operational managers can analyze the past business operations
through the data stored in Excel and predict some directions to a certain extent by
going through tables, graphs and other performance indicators.

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 → Right click and choose . This will bring a Format Cells dialog box as
shown in Figure 2-4.

This dialog box contains formatting of the contents, alignment, fonts, borders, fill, and
protection. Most of the formattings except for Number and Protection tabs contain
formattings similar to that of Word. Hence, this section will only concentrate on Number
formatting, which is more important for you as accounting students. The following section
will explain common formatting types used in Excel. Table 2-1 provides you with a description
of commonly used formatting on cells and an illustration of the same categories are shown
in Figure 2-5.

Table 2-1: Cell number formatting types

Category Description
General This does not define a specific formatting type. Hence, Excel will determine the
format of the contents.
Number Generic specification of numbers. You can specify negative number formatting by
selecting what is appropriate. E.g. negative numbers to be displayed within
brackets. Also, you can specify whether to have thousand separators.

Currency Similar to number formatting. Currency has a currency symbol that can be
specified from a drop-down menu. NOTE: if you are using cells to contain
currency related information, it is highly advised either to use currency or
accounting type to avoid rounding off issues.

Accounting It is as same as Currency type. However, it is defined for the purpose of holding
accounting information. Thus, accounting standard formatting is applied. E.g.
negative numbers appearing within brackets.

Date Formats to contain data information. “Type” list will specify the data format for
the cell. Remember that Excel stores a value for date as well as time. Thus, if it is
not formatted properly for date, it will display a number that would not be easily
interpreted.

Time Similar to date, time is also stored as a value. Both date and time can be
composite into single value too. Thus applying correct formatting will always
allow Excel to display the correct information in appropriate manner.

Percentage This will convert a number to a percentage and display the % at the end. E.g. 0.25
will be displayed as 25% and 25 will be displayed as 2500%. Once a cell is
formatted as percentage, you can directly enter the percentage value into the cell.
In other words, after formatting, entering 25 will be displayed as 25%. More
importantly, the percentage value will be taken in mathematical operations.

Fraction Fraction will display decimal places in a number as a fraction. E.g. 0.25 as ¼.

Text Contents in a cell will be treated as string. Even numbers will be treated as string.

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 Figure 2-5: Different formatting applied on Cells

2.7.2.1 Ribbon commands on formatting

Brief introduction on the ribbon commands is given in this section. The formatting that is
attained using the formatting-dialog box is more complete, while the
use of ribbon commands act as shortcuts to attain the same.

→ Select a cell or a range of cells.

→ HOME Number group . ‘General’ is the
formtting currently appiled on that cell. You can change the
formating type from the list.
→ You can change the currency sign from . If the currency sign
is not displayed, you will be able to find the correct one by clicking
‘More Accounting Formats.’
→ Precentage formatting can be appiled by pressing .
→ Thousand separator can be introduced by pressing .
→ You can either increase or decrease the number of
decimal places to be displayed in the numbers.

2.7.3 Pasting cells

In other applications of Office, pasting of contents is as simple as pressing Ctrl+V or clicking
on the paste icon. However, Excel has special pasting operations to accommodate different
requirements to be met when pasting contents into other cells. Table 2-2 describes the
pasting options available in Excel.

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 Table 2-2: Pasting options
Paste Description
All Paste everything in the source to the destination. If it contains formulas, the cell
addresses will be adjusted accordingly.

Values Paste only the values. This will prevent pasting any other cell related information
like formatting, formulas, or boarders. If the copied cell contains values from a
formula, only the result, not the formula, will be pasted.
Formulas This will allow you to paste formulas without pasting other contents of the copied
cell.

Formatting Only the formatting of the copied cell, not the values, will be pasted.

Transpose If you copy a horizontal set of cells, this will transpose the pasting into a vertical set
of cells.

Add This option will add the value that is copied to the values in the pasting cells. E.g. if
10 is copied and choose to Add on the set of values in the destination cells, the
destination cell values will be increased by 10.

If more than one value is being copied, the pasting will be limited to the number of
copied cells. Addition operation, however, will happen with the respective cell
values.
Multiply Same as ‘Add’ operation. Instead of adding, destination cell values get multiplied
by the pasting value.

Substract Same as ‘Add’ operation. Instead of adding, destination cell values get substracted
by the pasting value.

Divide Same as ‘Add’ operation. Instead of adding, destination cell values get divided by
the pasting value.

Paste special actions can be performed in the following manner.

→ Select a cell or a range of cells.

→ Press Ctrl+C OR right click and choose ‘Copy.’
→ Select the destination cell.
→ Right click; under ‘Paste options’ choose the correct command from

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 → To obtain Paste Special dialog-box; select .

2.8 Adding formulas to worksheets

A formula is a function that can perform operations like adding a set of values, counting
contents in a range of cells, finding a specific text in a cell range, and performing an operation
if a certain condition is met. There is a wide variety of formulas available in Excel to perform
various categories of operations. This section will introduce you how to insert a formula to a
work sheet and how to populate it.

There are two way of addition a formula.

1. Choosing one from ‘Insert Function’ dialog box.
2. Type the formula on the cell.

Inserting a Formula through the dialog box

→ Select the cell you want to insert the formula. E.g. in the example shown in Figure
2-3, click the cell B15.
→ Click on near Formula Bar. This will bring the ‘Insert Function’ dialog-box as
shown in Figure 2-6.
→ Choose the function you want to insert. This can be obtained either by typing what
you want to do in the search box or by choosing a category of functions.
→ Press ‘OK’ to get the Function Argument dialog-box as shown in Figure 2-7.

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 Choose a Type what you want to do
category of and excel will show a set
functions. of recommended
functions

List of functions
Shows the
under the chosen
parameters of the
category; or the
function and the
list recommended
expected answer if
by Excel
applicable.

Figure 2-6: Insert function dialog-box

Figure 2-7: Specifying arguments of a function

→ Depending on the function, number of arguments to be specified will differ. However,

the dialog box will assist you to specify all the required arguments.
→ Click on the argument box and then click on the cell / cell range that should be used
as the cells from which the values for that argument should be taken. E.g. We need
sum of values from B3 to B14. Therefore, in the box we specify the range, B3:B14.

Type the formula in the cell

Once you are familiar with the functions, the best way to insert a function is to type it with
the arguments for yourself.
→ Click on the cell where the formula should be inserted to.
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 → All the functions of Excel start with ‘=’ sign. Thus, begin typing ‘=’ and followed by
the name of the function. In this example, it is ‘sum.’ Excel will show the function, if
it is available, and its parameters for your convenience.
→ Specify the arguments with cells or cell ranges where applicable. You can also specify
the cells/ cell range by simply clicking on the respective cells during typing of the
formula.

Note: the arguments should be specified within parenthesis. Each argument is

separated by a comma. Functions can contain other functions within it, so that the
output of the other function will be used as the input value of the respective argument
of the first function.

2.9 Basic calculations

Although Excel contains many functions, there are some common functions used by almost
everyone. This subsection will discuss a few of these basic functions that can be used to
calculate figures. The result shown under each function is derived from the Monthly Sales
Report used in the example.

SUM
SUM function is used to obtain summation of a set of numbers. This function receives a
range of cells or individual cells as arguments and returns the total.

Result: Rs. 14,762,092.00

AVERAGE
AVERAGE function is used to obtain the average of a set of numbers in a range of cells
or specified set of cells.

Result: Rs. 1,230,174.33

MIN
This function returns the minimum value from a set of cells specified in the function.

Result: Rs. 720,560.00

MAX
MAX function returns the maximum value from a range of values specified in a range of
cells.

Result: Rs. 2,125,364.00

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 COUNT
Count function returns the number of entries in a range of cells specified in the function.

Result: 12

In addition to the use of built-in functions of Excel, you can also ask Excel to perform any
calculation using numeric operators. However, you must start the formula with an ‘=’ sign
and construct the mathematical operation using standard operators (+, -, /, *, ^).

The above equation can be written in Excel as follows;

C10 B10 ^2 C15 B18 2

2.10 Logical operations

Logical operations are also known as conditional operations. In other words, we can specify
a set of operations to be carried out when a specific condition is met. As human beings, every
day, every minute we evaluate a variety of conditions and exercise appropriate actions to
achieve a desired outcome. For instance, consider the following sentence;

“Open your umbrella if it starts to rain.”

In this case, you will ask yourself; “Is it raining?” If the answer is “Yes” then you will open your
umbrella. If the answer is “No” then you will not open your umbrella. The question you ask
is the condition you check and the two actions you take are the two decision/action routes.
If the above sentence is restructured with the logic, it will appear like this;

“If it starts to rain condition , open your umbrella action, if TRUE else do not open it.
action, if FALSE .”

2.11 Spreadsheet decision logics

Decision logics are the one that will get evaluated when making decisions in an organization.
In Excel these decision logics can be implemented through various logical operators and
combiners such as ‘AND’, ‘OR’,’IF’, Nested IF etc.

Excel has a built in “IF” function which allows you to evaluate different conditions and to
specify different actions depending on the output (true/false) of the condition.

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In our example, suppose that we need to find out whether the average monthly performance
of the organization from 2013 to 2017 is good or in warning state. The state would be
“Warning” if the average performance of a month is below Rs 1,250,000. In order to get this
information, follow the below steps;

→ Select the H3 cell where the status will be displayed.

→ Then we need to type a formula using Excel functions to determine the output. To
get the average monthly sales during the specified period, we must use the ‘Average’
function. Then we must determine whether the average sales of that month is below
Rs. 1.250.000. If yes, a “WARNING” is displayed or else “GOOD” is printed.
Therefore, the formula should be as follows;

" "" "

→ Hold the fill handle and drag through all the months to fill the cells with sate. Note
the changes of the cell addressing in the formula.

In this example, we use comparison operators to instruct Excel with the condition to be met.
If the comparison denoted by the condition is met, then it returns as TRUE otherwise FALSE.
The following table summarizes the Table 2-3.

Table 2-3: Comparison operators

Comparison operator Meaning Example
= (equal sign) Equal to A1=B1
>(greater than sign) Greater than A1>B1
<(less than sign) Less than A1<B1
>= (greater than or equal to sign) Greater than or equal to A1>=B1
<= (less than or equal to sign) Less than or equal to A1<=B1
<>(not equal to sign) Not equal to A1<>B1
Source support office com en us article Calculation operators and precedence in Excel 48be406d 4975
4d31 b2b8 7af9e0e2878a

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There may be situations where you want to evaluate more than one comparison in a single
decision. For instance, open your umbrella if it starts raining or too sunny. In this case, your
decision of whether to open your umbrella is decided depending on two conditions. When
more than one condition is used, we need to use a logical operator to combine these
conditions so that there is a final logical output. The Table 2-4 shows a brief description of
kinds of operators used to combine multiple comparisons.

Table 2-4: Logical operators

Logical operator Description
AND All the conditions must be true for the final output to be TRUE
OR At least one condition should be true for the final output to be TRUE.

XOR Exclusive OR; when all or neither condition is true, the final output is
FALSE.
NOT Negate the logical output. If TRUE is return, this operator makes it
FALSE.

=AND(A2,B2) =OR(A2,B2) =XOR(A2,B2)

Figure 2-8: Logical operator functions

Excel contains built-in functions to perform these logical operations. Most commonly used
logical functions are AND, OR, XOR, and NOT. The outputs of these functions are
demonstrated in the Figure 2-8. Here, the condition could be any comparisons mentioned
before.

To demonstrate the proper use of some of these operators, let us consider a situation where
an organization has to offer three categories of promotions (Bronze, Gold, and Silver) based
on two conditions, Item Value and Loyalty level in years. The qualifying conditions for the
respective promotions are as follows;
Bronze promotion : Customer should be loyal for more than five years and
the value of the items purchased is more than or equal
to Rs. 5,000.
Gold promotion : Either one of the conditions of the above bronze
promotion is meat but not the both.

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 Silver promotion : None of the conditions are met. I.e. customer is loyal
for less than five years and the purchased value is less
than Rs. 5,000.

Suppose that the Item Value and the Loyalty level are provided in a worksheet (see Figure
2-10). Your task is to construct a formula in Excel to display the promotion applicable to each
customer. The formula should be as follows;

" "
" "
" "

The formula uses multiple functions within a function (see Figure 2-9). Pay attention to the
first IF function with its respective placeholders (condition, true, false). Within the condition
placeholder, AND function is used as it needs to evaluate whether both conditions are met.
If yes, then it displays “BRONZE Promotion.” If no (either one of the condition is not met), it
jumps to False placeholder. The False placeholder of the first IF contains entire second IF
function. The condition ‘placeholder’ of the second IF function has XOR5 function to detect
customers who meet one of the conditions exclusively. If that part is true, it displays “GOLD
Promotion,” or else it displays “SILVER Promotion.”

= IF ( AND (….), “BRONZE”, IF( XOR(…), “GOLD”, “SILVER” )

1st IF 1st IF TRUE
) 2nd IF 2nd IF TRUE 2nd IF FALSE
Condition placeholder placeholder
Condition placeholder

1st IF FALSE
placeholder
Figure 2-9: Nested function structure

5
In this specific situation, you can also use OR function for the reason that the scenario where both conditions
are met is already handled by successive AND function of the same formula.

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 Figure 2-10: Logical operator functions demonstration

2.12 Financial functions

Excel provides very useful set of functions for processing financial information. It should be
noted by students that this course manual will neither try to introduce nor provide a detailed
demonstration of financial concepts. Rather, it provides an introduction on how to use
respective functions in Excel. This section will briefly introduce you the following commonly
used financial functions.

Table 2-5: Commonly Used Financial Functions in Excel

Function Description
PMT Calculate payment for a loan based on constant
payments and constant interest rate.
PPMT Portion of the principal amount of PMT.
IPMT Portion of the interest amount of PMT.
RATE Returns the interest rate of an annuity.
NPER Returns the number of periods for an investment.
PV Returns the present value of an investment.
FV Returns the future value of an investment.

2.12.1 Common financial functions

This section discusses the use of above mentioned commonly used financial functions.
Please note that there are many financial functions available in Excel and hence, you must
explore them and get familiarized.

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PMT function
PMT function calculates and returns the amount you have to pay as a loan instalment when
the payment and interest rate are constant. It has the following syntax.

Rate : Interest rate of the loan for the period that is provided in nper For instance, if the
loan is paid on monthly basis the rate has to be for a month.
Nper : The total number of instalments for the payment of the loan.
Pv : It is the present value or the loan value.
Fv : This is the value to be remaining at the end of the period. This parameter is
optional and considered as ‘0’.
Type : whether the payment is due at the end (default value) or beginning of the period.

RATE function
RATE function returns the interest rate considering a payment made periodically to pay off
a loan value. Rate calculation is done based on iterations and 20 iterations is the maximum.
If it is unsuccessful within those iterations, it returns #NUM.

Nper : The total number of instalments for the payment of the loan.
Pmt : Payment made in each period. This value should be fed as a negative value.
Pv : It is the present value or the loan value.
Fv : This is the value to be remaining at the end of the period. This parameter is
optional and considered as ‘0’.
Type : whether the payment is due at the end (default value) or beginning of the period.
Guess : your guess about the interest rate. The default value would be 10%.

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Note that the A2 cell is negated as it is the monthly instalment to be paid off. The result is
multiplied by 12 to get the annual interest rate since the function returns a rate for a payment
period.

NPER function
NPER calculates the number of periods associated with an annuity. You will be able to
determine the number of payments to be made when the monthly instalment of the loan
changes at a given interest rate. The syntax of the function is as follows;

Note that the parameters of the function are same as explained before.

PV function
PV function returns the present value of an annuity at a fixed interest rate for a fixed period.
Suppose you want to find out the loan you need to borrow if it is to be given at a fixed annual
rate of 9% for 5 years and the amount you are ready to pay per month is Rs. 50,000. To find
the answer, PV function with the following syntax can be used.

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Not only can PV function be used to determine the loan value of an annuity, but also to
calculate the present value of a future lump sum. Suppose that you want to find out the
present value of a bond worth of Rs. 100,000 at its maturity after three years. To get the
answer, you must ignore (leave it blank between the commas) pmt argument of the function
and use fvto specify the future value.

As shown in the above exhibit, the present value (or the discounted value) of the bond at its
maturity is Rs. 79,163.12.

FV function
FV function returns a future value of periodical receipt or a lump sum. Just as PV function, FV
function also can be used to obtain different kinds of information. To demonstrate its uses,
suppose that you have an investment option that you will receive Rs. 10,000 every month for
a period of three years. You may want to find the total amount you will have received at the
end of the three-year period considering a fixed interest rate of 12%. You can use FV function
with the following syntax to get an answer.

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The amount you will have is Rs. 430,768.78. Note the adjustments made to rate and nper
arguments. Further, pmt value has been negated to get the function to return a positive
value.

FV function can also be used to find a future value of a present lump sum. Suppose Rs.
250,000 is deposited today in a fixed deposit at 13% interest rate for five years. Interest for
this deposit is calculated every year. To find the future value of the deposit at the maturity
after five years, FV function can be used.

2.12.2 Loan amortization schedule

This section will demonstrate how to prepare a loan amortization schedule in excel using the
functions we have learned in the previous section. There are two additional functions to be
used for completing the task. These two are PPMT and IPMT. The former returns the portion
of the principal amount of a single instalment while the latter returns its interest portion.
These two functions have the same parameters and additional per parameter to specify the
nth instalment whose portions to be determined.

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 Figure 2-11: Loan amortization schedule

Suppose that a loan worth of Rs. 280,000 is to be obtained at a fixed interest rate of 18% per
annum for a period of two years. An amortization schedule needs to be prepared to show the
amount being paid as the principal amount as well as the interest, and the total balance due
at each monthly instalment. Do the following steps to get the schedule as shown in Figure
2-11.
1. Enter basic information about the loan, loan amount, annual interest rate, payments
for a year, and the period of the loan.
2. Enter the titles for the schedule in row 8.
3. Since it is for two years monthly, total number of periods the loan is amortized is 24.
Enter 1 in A9 and 2 in A10. Then select both and drag from the fill handle that appears
on the active cell boarder up to A32.
4. First is to get the amount as an instalment of the loan. Select cell B9 and insert PMT
function as follows;
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 Result: -Rs. 13,978.75

Note the cell locking with the ‘$’ sign. Please refer section 2.5 for more information.

5. Next is to get the portion corresponding to the principal amount from the instalment.
This is obtained with PPMT function as follows;

Result: -Rs. 9,778.75

The second placeholder of PPMT is for the payment number out of the total number
of payments defined in nper. Thus, it accepts a number between 1 and nper. The
meaning of the result is that only Rs. 9,778.75 out of the monthly instalment of Rs.
13,978.75 will be paid as the principal amount and the remainder is paid as the interest
portion.

6. For getting interest portion of the monthly instalment, IPMT function can be used.
Parameters used in this are identical to that of PPMT.

Result: -Rs. 4,200.00

7. The balance due can be calculated using the values obtained previously. This due
amount is the principal amount. Hence, the principal payment must be deducted
from the loan amount to get the due amount. The first month balance should be
reduced from the original loan amount. Hence, is used where C3
contains the loan amount.

In the successive cells, the balance amount from the upper cell is used to deduct the
principal payment of the current period. Hence, the formula should look like
for the balance of the second month.

8. Populate the formulas to the other cells by copying and pasting.

2.12.3 Depreciation
There are number of depreciation functions provided by Excel. Thus, with the help of these
functions, you can calculate depreciation schedule for an asset over its lifetime by using
multiple methods. Students must obtain the knowledge about depreciation from the
respective course models of Financial Accounting. This section will only give you an
introduction to the functions and the presentation methods.

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 Table 2-6: Depreciation functions
Function Description
SLN(cost,salvage,life) Returns the straight-line depreciation of an asset for one period.
SYD(cost,salvage,life,period) Returns the sum-of-years' digits depreciation of an asset for a
specified period.
DB(cost,salvage,life,period,[month]) Returns the depreciation of an asset for a specified period by using
the fixed-declining balance method.
DDB(cost,salvage,life,period,[factor]) Returns the depreciation of an asset for a specified period by using
the double-declining balance method or some other method that
you specify.
VDB(cost, salvage, life, start_period, Returns the depreciation of an asset for a specified or partial
end_period, [factor], period by using a declining balance method.
[no_switch])
[Adapted From https support office com en us article Excel functions by category 5f91f4e9 7b42 46d2 9bd1
63f26a86c0eb]

In this section, we will consider machinery which has a useful lifetime of 5 years and construct
two schedules, depreciation value and asset value.

→ Prepare a schedule as shown in Figure 2-12.

→ There are no specific ways to prepare these reports than entering the right function
into the cell and make the correct cell references.

You should see the depreciation values differ based on the method it uses. The depicted
drafts demonstrate the actual behaviour of both depreciation values and the asset value. The
Figure 2-12, ‘(a) Schedule’ shows the calculated figures and the formulas used to get the
respective cell values shown in ‘(b) Formulas in the cells’.

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 (a) Schedule

(b) Formulas in the cells

Figure 2-12: Output of depreciation example

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Figure 2-13: Depicted depreciation patterns

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Advanced functions and formulae for financial management
Under basic financial functions we have already discussed different functions and formulae
such as Future value, Present value, PMT, PPMT and IPMT that can be used for the financial
calculation. As an extension to that, in this section we are planning to discuss several
advanced functions and formulae for financial management such as FV schedule, NPV, IRR,
MIRR and etc.

FV Schedule function
This generates the future value of an initial principal after applying a series of compound
interest rates. It will calculate the future value of an investment with a variable or adjustable
interest rate. Below syntax can be used to calculate FV Schedule.

= FVSchedule (principal, schedule)

Principal: Present value of a particular investment

Schedule: A series of interest rate put together

NPV function

This calculates Net Present Value of an investment by using a discount rate and a series of
future payments and income. Syntax of NPV is given below.

=NPV (Rate, Value 1, [Value 2], [Value 3]…)

Rate: Discount rate for a period

Value 1, [Value 2], [Value 3]… : Positive or negative cash flows ( Here negative value
are considered as payment, Positive values are considered as inflows)

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XNPV function

We used NPV to calculate the net present value for a series of cash flows that is periodic.
XNPV can be used to returns the net present value for a schedule of cash flows that is not
necessarily periodic. Rather specific dates are mentioned for each payment and income.
Syntax for XNPV;

=XNPV (rate, values, dates)

Rate : The discount rate to apply to the cash flows.

Values : A series of cash flows that corresponds to a schedule of payments in dates.
The series of values must contain at least one positive value and one
negative value.
Dates : A schedule of payment dates that corresponds to the cash flow payments.
The first payment date indicates the beginning of the schedule of payments.
All other dates must be later than this date, but they may occur in any order.

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IRR function
This returns the internal rate of return for a series of cash flows represented by the numbers
in values. These cash flows do not have to be even, as they would be for an annuity. However,
the cash flows must occur at regular intervals, such as monthly or annually. This can be used
to understand whether any new project or investment is profitable or not. If IRR is more than
the hurdle rate (acceptable rate/ average cost of capital), then it’s profitable for the firm and
vice-versa

The internal rate of return is the interest rate received for an investment consisting of
payments (negative values) and income (positive values) that occur at regular periods. IRR is
closely related to NPV, the net present value function. The rate of return calculated by IRR is
the interest rate corresponding to a 0 (zero) net present value.

Following syntax can be used to calculate IRR.

= IRR (values, [guess])

Value: An array or a reference to cells that contain numbers (positive or negative

cash flows) for which you want to calculate the internal rate of return.
Guess: A number that you guess is close to the result of IRR (Optional. If guess is
omitted, it is assumed to be 0.1 -10 %.)

XIRR function

This uses to calculate the cashflows having specific dates. Syntax of XIRR is given below.

=XIRR (values, dates, [guess])

Note that the parameters of the function are same as explained before.

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MIRR function
Returns the modified internal rate of return for a series of periodic cash flows. MIRR considers
both the cost of the investment and the interest received on reinvestment of cash. MIRR
signifies that the investment is profitable and is used in business.

MIRR (values, finance_rate, reinvest_rate)

Values: An array or a reference to cells that contain numbers. These numbers

represent a series of payments (negative values) and income (positive
values) occurring at regular periods.
Finance rate: The interest rate you pay on the money used in the cash flows.
Reinvest rate: The interest rate you receive on the cash flows as you reinvest them.

Effect function
This can be used to calculate the effective annual interest rate, given the nominal annual
interest rate and the number of compounding periods per year. Syntax of the Effect function;

=EFFECT (nominal_rate, npery)

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 Nominal rate: Nominal interest rate
Npery: Number of compounding periods per year

Nominal function
This function returns the nominal annual interest rate, given the effective rate and the
number of compounding periods per year.
=NOMINAL (effect_rate, npery)
Effect_rate: The effective interest rate
Npery: The number of compounding periods per year.

2.13 Statistical functions

This section brings only an introduction to the basic statistical functions in Excel. Students
should refer the QMB course manual for statistical knowledge.

Like in other categories, Excel has a variety of functions in statistics. You will be able to access

them either though formula bar or FORMULAS .

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For demonstration purposes, we are going to use Monthly Sales Report example and insert
the statistical measures into new columns. Thus, the examples shown here will have the
corresponding cell ranges.

Mean Average
Statistical mean in Excel can be obtained through AVERAGE function described earlier in this
chapter.

Result (January): Rs. 1,022,677.65

Median
Median function will return the median value of the distribution when sorted. An example is
shown below.

Result (January): Rs. 1,011,593.85

Standard Deviation
Excel has two standard deviation functions, one for the population and the other for the
sample. The one that returns population deviation is STDEV P and the one that gives sample
deviation STDEV S.

Result (January): Rs. 136,436.38

2.13.1 Frequencies
Excel provides a FREQUENCY function to get a list of occurrences from a given set of data to
produce a frequency table. Suppose that you have a list of customers and the purchase values
on a specific day. You are interested in knowing the number of customers in each thousand-
category based on the sales information. I.e. the number of customers who purchased less
than Rs 1,000; between Rs. 1,000 and Rs. 2,000; between Rs. 2,000 and Rs. 3,000 and so on.

Frequency function is an array formula. That is, it returns and array (a list of) values instead
of a single value as with most other formulas we discussed in this chapter. Hence, you must
enter the formula properly into the Excel sheet for it to process information correctly. The
output of the example discussed here is in Figure 2-14.

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 Figure 2-14: Frequency table with frequency array
Formula

Follow the steps properly to generate a table of frequencies.

1. Enter the upper boundary of each group in a set of adjacent cells. In the example, it is
D3:D8.
2. Select cells where frequency data should be populated. In this case, the frequency
data should be displayed in E3:E8. Note that you must select the cells. It is not as with
other formulas that you enter in one cell and paste on the other. Since, FREQUENCY
formula returns an array, you must select a range of cells.
3. On the ‘Formula Bar’ enter ; where B2:B14
contains data and D3:D8 contains the ranges (bin data). After entering the formula,
DO NOT just press enter. You must press Ctr + Shift + Enter. This will populate the
results in the selected cell range. Note that the formula is now within {..}. This denotes
Excel that it is an array formula.

2.13.2 Descriptive statistics

Descriptive statistics contain statistical information about a set of data. These include Mean,
Standard Error, Median, Mode, Standard Deviation, Kurtosis, Skewness and the likes. You
may calculate each of them using respective Excel functions. Or, you may use Statistical
Analysis Tool that comes with Excel. However, by default, this Add-in is inactive, and you
must activate it before proceeding.

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Activating Data Analysis Tool

→ FILE Options Add-ins.

→ Under ‘Inactive Application Add-ins’ you should see ‘Analysis ToolPak’
→ Then press the ‘Go…’ button.
→ It will ask whether you need to add additional add-ins like ‘Analysis ToolPak – VBA,’
‘Solver Add-in’. Choose as appropriate.
→ In DATA ribbon, now you should be able to see a group named ‘Analysis’

Obtaining Descriptive Statistics

→ DATA Analysis group . This will bring ‘Data Analysis’ dialog-box.

→ Choose ‘Descriptive Statistics’ from the
list box. This will bring ‘Descriptive
Statistics’ dialog-box.
→ Choose the data range that you would like
to get the descriptive statistics about. Note
that you may choose a range of cells with
multiple data fields. However, all the data
in the range (except for the headers)
should be numeric.
→ Choose a cell for the output to be
produced. Remember that this will
generate 18-20 row output. Thus, make
sure that no data is within that range to
prevent overwriting of data.
→ Choose and press OK.
This will generate descriptive statistics of
the fields you have specified (see Figure
2-15).

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 Figure 2-15: Descriptive statistics

2.13.3 Correlation Analysis

Correlation analysis helps to find how strongly two variables are related to each other. If the
correlation coefficient is +1, it shows strongly positive relationship whereas -1 denotes
strongly negative relationship.

Excel has built-in functions called CORREL and PEARSON. Both functions have similar
parameters. I.e. you must enter two arrays of data for the correlations to be calculated.

Suppose that you want to know whether monthly wise sales are correlated between 2012
and 2013. You may use the function as bellow.

Result: 1

The second option would be to use Data Analysis ToolPak we installed previously.

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 → DATA Analysis group choose Correlation from the list. This will bring the same
dialog box as Descriptive Statistics.
→ Choose the cell range containing data.
→ Choose the output destination cell.
→ Press Ok.
→ Correlation matrix will be produced in the specified destination.

The correlation matrix of the Monthly Sales Report example is as follows;

2.13.4 Regression analysis

Regression analysis is fundamental in most of the
statistical analyses and therefore it has been properly
covered in QMB course manual. This section will
introduce the use of the data analysis tool to obtain the
regression statistics, but we will not interpret the output
as it is done in QMB.

Suppose that a retail store decided to spend in store

promotions for 20 days and collected sales data to
determine whether in store promotion is an effective
drive for sales.

For obtaining comprehensive regression analysis, you

can use Data Analysis tool as before.

→ DATA Analysis group Choose Regression.

→ This will bring a dialog-box to receive inputs for the regression analysis. Correctly
specify the two data arrays as independent and dependent.
→ Set the destination cell to produce the result. Note that the result flows to many rows
and therefore it is advised that your worksheet does not contain any data in rows
below the chosen destination cell.
→ Press Ok to get a detailed output. See Figure 2-16.
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 Figure 2-16: Regression statistics

According to the output produced here, the in-store promotions-significantly determines the
sales values. Accordingly, 54% of the variation in sales is explained by in store-promotions.

2.14 Organizing and analyzing data

When organizing data in excel for analysis arrange your data set following these 2 simple
rules to get better results.

• Add a header row where each column has a unique heading - duplicate headings will
cause confusion.
• Make sure there are no blank rows within your data set.

2.15 Charts
Chart is a very useful tool of communication. It not only depicts the values but also reveals
patterns not directly noticeable to a human through numbers. Excel provides different kinds
of charts to accurately and appropriately display data on your worksheet. This section will
introduce you the fundamentals of charts and you are required to further investigate the use
of graphs to present data for effective decision making. Monthly Sales Report will be used as
the primary example in the demonstration of this section.

2.15.1 Inserting a chart

→ Select the data with its field titles. In our example; A2:G14 including the titles (months
on the rows years on the columns).
→ INSERT Charts group. You can see basic chart types in the ribbon.

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→ In this instance, click line-chart icon . You will see line chart options listed.

→ Choose ‘Line with Markers’ option. You can also investigate the other options
by moving the mouse over. A short description with the primary use will appear.
→ The chart will appear as an object floating on the worksheet. Move and place the
chart object where appropriate.
→ You can also adjust the size of a chart object with its handles.

→ Alternatively, you can call the Insert Chart Dialog-box to choose any chart from all the
charts available.
→ This dialog box has two tabs, ‘Recommended Charts’ and ‘All Charts.’ While ‘All
Charts’ contains all the charts available in Excel, Recommended Charts will show the
types more suitable to represent the data you have selected.

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Changing the chart type
You can easily change a type of a chart at any time.
→ Select the chart object.

→ DESIGN Type group .

→ This will bring the Change Chart Type dialog box. Change the chart according to your
requirements.

2.15.2 Formatting a chart

You can format a chart by adding titles, formatting fonts, adding data labels, changing the
colour and so on.

Adding Chart Elements

→ DESIGN Chart Layouts group .

→ This brings a drop-down menu with all the chart elements.
→ Suppose you want to add a title to an axis (X axis or Y axis).
Click on and choose from Horizontal or
Vertical Axis Title. This will add a title text box to the chart
object which you can edit.
→ Similarly, you can add a Chart Title.
→ Data Labels will show the values at respective data points on
a line chart. Similarly, if you need the data table to be added
to the chart object, you can do that with ‘Data Table.’
→ Legend of a chart explains the symbolic coding in the chart to represent different data
series. E.g. Years.
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Alternative way to access the same commands is to use the quick command icons appear
with each chart object.
→ Click on a chart object.
→ Three icons appear on the side of the chart.
→ Click on each to get different formatting options.

Do some experiments with different data elements to get familiarized with options available
in Chart Objects. Remember that depending on the chart type the elements will differ.

Change the appearance

You can change the appearance of a chart by changing its fonts, colours, and the likes.
→ You can change formatting options by right-clicking on any
object.
→ You can change the fonts of titles, axis titles, and colours of
them by clicking on each of these elements and changing the
fonts and other formatting through font ribbon commands.
→ Similarly, you can change the colours of any elements by just
clicking / right clicking and changing the colour from ‘Fill’
command.

2.15.3 Editing data series

Data series defines the data to be displayed in a chart. You can change any data series of a
chart.

→ DESIGN Data group . This will bring ‘Select Data Source’ dialog-box.

→ Rows and columns can be swapped by changing the presentation of data. For
instance, instead of presenting yearly sales data on a line corresponding to each

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 month, you can change the presentation to present monthly sales per year, where

month is represented in a line. You can do that by clicking .

→ The left pain contains the plotting data

which contains both data cell range and the
legend cell range. You can edit or add any
data related information.
→ Press to get Edit Series dialog-box.
‘Series name’ contains the name of the
series, while ‘Series values’ contains the
data.
→ The right pane contains the X-axis labels. You can change any ranges from here
according to your requirement.

Suppose that you want to display average sales of the period from 2012 to 2017. This is a
single series value. According to our example, we have ‘mean’ values calculated for each
month in the column ‘I.’

→ Select I2:I14.
→ INSERT Charts group Line chart. You will see that the X – axis does not show any
label values. In order to add data label values, do the following.
o Click the chart.

o DESIGN to get the dialog-box.

o In the right pane (Horizontal Axis-labels), you will see 1,2,3,4…12.
o Click to get Axis Labels dialog box.
o Click on the box or and select the month labels (A3:A14).
o Click ‘Ok’ and you will now see the month names as labels. Click Ok to apply
the changes.

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2.16 Charts for business analysis
Charts are excellent ways of presenting data about a business that help top management to
take effective decisions. Though figures speak accuracy, they usually hide the patterns from
being visible at a glance. Charts, on the other hand, removes that barrier and brings about
the patterns to visibility. However, it is important to use the correct chart to bring the
intended patters to attention.

Different chart types serve different purposes. Following are some common uses of chart
types.
- Contribution analysis
Contribution, also known as share, can be easily analyzed by using Pie charts, Donuts
and Stack Columns. The key visualization to be attained here is the relative values
that cannot be directly observed in numbers. The contributions with pie and the stack
charts can be very useful in analyses such as market share, cost components of a cost
centre, and corporate profit contributions.

- Trend value analysis

Trend analysis is a common method used by most organizations to predict the
possible futures with regards to a variety of situations such as market demand,
market value of shares, and certain economic indicators. These analyses commonly
use line charts and depicted trend lines over a pattern to derive the line of best fit.

- Group value analysis

Comparison of individual elementwise as well as group-wise values can be done
though grouped-charts. One of the commonly used group chart is bar chart. For
instance, year on year sales values analysis of a set of brands can be effectively
depicted using grouped-bar charts, which shows both brand wise performance as well
as yearly performance of all the brands.

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 - Multivariate analysis
Analysis of variations of multiple factors can be easily visualized on a 2-D plot using a
graph type called Radar Charts. For instance, suppose that you are interested in
getting to know how different types of overhead costs vary in different production
plants situated in different parts of the country. This multi-dimensional data can be
easily represented in a Radar Chart with multiple accesses and lines representing the
aspects of production and production plants respectively. Especially, when the
factors are directly none-comparable, Radar Charts become a useful tool.

2.17 Data tables

Though Excel is a spreadsheet that has rows and columns by default, content of a
spreadsheet is not considered always as a table. Thus, you must specify a range of cells to be
treated as a table, if you intend to draw the table specific advantages into that range of cells.
These advantages include, easy entry of data, easy sorting and filtering, quick access to
functions, and table specific cell addressing.

To insert a table;
→ Enter data as usual in a spreadsheet with titles etc.
and then click on a cell inside a range of cells to be
specified as a table.

→ INSERT TABLES group . This will

highlight the continuous set of data automatically as the table and brings up a dialog-
box showing that range.
→ Press Ok to convert the cell range to a table. You can see the table headers are
converted to facilitate filtering and sorting.

→ You can do easy formattings like applying table styles, etc through DESIGN ribbon
which appears once you click inside a table.

Remove a table;
→ Click inside the table to convert back to normal range of cells.
→ DESIGN TOOLS group

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 → There will not be any change to the data, formulas, and formattings you may have
had.

2.18 Data sorting

Sorting data is useful in many cases. However, it needs to be done in a manner in which the
data records are moved with all their fields. Otherwise (if data is not moved in records), the
field values get mixed up contaminating the records. Nonetheless, Excel provides you with
easy tools to do the sorting. The example used here is the one that has been used in Figure
2-15.

→ Select the entire set of data including all the fields in it. Also include the titles of the
fields in the selection. In our example, cells A1:H13.

→ DATA Sort & Filter group . This will bring ‘Sort’

dialog-box.
→ Choose field name you want the list to be sorted on, from ‘Sort
by’ list. Here, choose ‘First Name.’

→ ‘Sort On’ field tells Excel whether to use the value of cells or any other property like
colour.
→ ‘Order’specifies whether to sort data in ascending order or descending order.
→ Press Ok to sort the entire dataset.

Sorting Ordered List

The order of some lists is predetermined and cannot be sorted either
in ascending or descending order. For instance, day of week or
months have a specific order. If you order a list with days, Excel will
sort it bringing Friday as first in the list then Monday and so on.
Follow the below steps to correctly sort such a list (e.g. what is
shown here);

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 → Select the cell range.

→ DATA Sort & Filter group . This

will bring Custom Lists dialog-box.
→ Choose the list with “Sunday,
Monday….”
→ Press OK to both dialog boxes.
→ You can now observe that the list is
properly sorted.
→ If you have a custom list, you can enter it
by choosing ‘NEW LIST.” Then enter the
list in the right-hand side text box.

2.19 Filtering
Once data are entered in a long list, filtering them will direct you to extract information
easily. In this section we will consider the example given below (see Figure 2-17).

Figure 2-17: Credit purchases example

Apply Auto filter

→ Select the cell range by selecting A1:H:13; OR, click anywhere within this data set and
press Ctr+A.

→ DATA Sort & Filter group .

→ List icons will appear on each header column.

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 → Click down-arrow to see the filtering options. Unique entries in each column are
shown in the list. You can check / uncheck to make the entries visible / hide. Only the
checked entries will be visible.
→ E.g. select “Kamal” and unselect everything else. You will
see only the entries corresponding to Kamal in the data
area.
→ You can apply multiple filters on different columns / fields
by choosing from each column. E.g. Choose “kamal” from
FirstName and 50 from SellingPrice. As a result, you will
get a record where both filters are applied.
→ To clear a filter from a field; click on the down arrow button

and choose .

Specify more filtering criteria

You can apply more filtering criteria on each field. For instance, if you want to display entries
whose ‘Margin’ is greater than 50, then you need to specify the criteria as follows;
→ Click on the down-arrow. E.g. Margin field.

→ Choose . This option will only be enabled if

the field contains numbers. For text a different set of options
will be enabled.
→ There are varieties of options to specify a range of values. In
this case, choose ‘Greater Than Or Equal to
→ This will bring Custom AutoFilter dialog-box.
→ In the first text box, type 50 and press Ok.
→ Also note that you can choose different ‘And or ‘Or to
specify more than one criteria on the same column (refer to 2.10Logical operations).
→ Press Ok to all the dialog boxes.
→ You can explore other options like Colour based filtering to extract information based
on different information.

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2.19.1 Advanced filtering

2.19.1.1 Set up a criteria range

Type your conditions or criteria, in a separate range on the worksheet. In theory, the criteria
range can reside anywhere in the sheet. In practice, it's more convenient to place it at the
top and separate from the data set with one or more blank rows.
Advanced criteria note:

• The criteria range must have the same column headings as the table / range that you
want to filter.
• Criteria listed on the same row work with the AND logic. Criteria entered on different
rows work with the OR logic.

2.19.1.2 Apply Excel advanced filter

In the criteria range in place, apply an advanced filter in this way:
→ Select any single cell within your dataset.
→ Go to the DATA tab > SORT & FILTER group and click Advanced.

→ Configure the Advanced Filter parameters

In the Excel Advanced Filter dialog window, specify the following parameters:

• Action. Choose whether to filter the list in place or copy the results to another
location.

• List range. It's the range of cells to be filtered, the

column headings should be included.

If you've selected any cell in your data set before

clicking the Advanced button, Excel will pick the entire
list range automatically. If Excel got the list range
wrong, click the Collapse Dialog icon to the
immediate right of the List Range box, and select the
desired range using the mouse.

• Criteria range. It's the range of cells in which you input

the criteria.

→ Finally, click OK

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2.20 Conditional formatting and sorting
In contrast to the formatting that can be applied to a range of cells, you can ask Excel to apply
customized cell formatting dynamically only when certain conditions are met. This way, it is
possible to visualize some patterns in a set of data by using different formattings. For
instance, you may ask Excel to turn the background colour of a cell to red, when the value of
that cell is less than 100. So, Excel will turn the background to red only if the value of that cell
is less than 100.

Considering standard work hours per week being 40 hours, suppose that you are interested
in finding out whether the workers in a factory have a work status as over, standard, less, or
warning. The table below shows the criteria to be used.

Table 2-7: Criteria for Working Hours

Status Condition: Hrs/week Background

Colour
Standard Between 39 and 41 No formatting
Over > 41 Green
Less Between 35 and 39 Yellow
Warning < 35 Red

→ Select the cell range that needs to be formatted. You can also format a single cell and
later populate the formatting to the other cells.

→ HOME Styles group . Note that there are defined

short-cut commands under this button. However, we will look at the ‘New Rule’
command that brings everything into a single dialog-box (see Figure 2-18).
→ This will bring ‘New Formatting Rule’ dialog-box. There are several options listed in
the list box. Depending on the option chosen, you can observe ‘Edit
Rule Description:’ changes. Choose for this example.
→ Choose ‘Cell Value’ from the first list box.

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 Figure 2-18: Rule definitions for conditional formatting

→ We are now going to define the rule. Since the ‘Standard’status does not have any
formatting, we leave that one undefined.
→ To define ‘Over’ state; choose ‘greater than’ from the second list-box. Then type 41
in the textbox.

→ To specify formatting for the cell, choose that will bring the formatting
dialog-box. Choose ‘Fill’ tab and pick the colour green.

→ Press OK.
→ Again, go to ‘Conditional Formatting’ ‘New Rule’. Then specify the rule for
‘Less’ status.
→ Repeat these steps until you define all the rules and formatting.
→ You can observe the change of formatting depending on the cell contents. Change
some values randomly and observe the applying of new formatting occurs
automatically.

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Editing conditional formatting
You can edit the rules and formatting defined for any cell at any time. However, it is
important to note that the formatting get applied to each cell. Therefore, you must specify
either the rage of cells you have already applied formatting to or tell that to Excel in the
Conditional Formatting Rule Manager.

→ HOME Styles group . This will bring the

‘Conditional Formatting Rule Manager’ dialog-box.
→ A list of already applied conditional formatting is shown. You can specify which rules
you want to manage in . By default, it shows the ‘Current
Selection’.
→ You can Edit, Delete, or Add rules through this dialog-box.

Applying a progress bar

Depending on the value that a cell contains, a progress bar like formatting can be applied.
Suppose that you evaluate the completion status of assigned tasks for each worker in the
factory by considering a value between 0 (nothing competed) and 100 (completed). We can
apply conditional formatting to introduce a progress bar depending on the value it contains.

→ HOME Stylesgroup

→ Under ‘Format Style:’ there are several options you can choose from. For instance,
you can specify an icon set (such as stars or circles), a two-colour continuum, or a data
bar. For this example, choose ‘Data-Bar’
→ You must specify the minimum and maximum for the data bar to determine the
position corresponding to the cell value. For this example, we choose ‘Number’ from
the list box and provide respective values (Minimum=0; Maximum=20).
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 → Under ‘Bar Appearance:’ section, specify the formatting of the bar, such as colour
and border. For this example, choose ‘Green’ as the Solid Fill colour.
→ Press OK.

There are many other formattings you may apply depending on the requirement. You should
explore all the options in the menus and practice for yourself. The formatted output of our
factory example is shown in Figure 2-19.

Figure 2-19: Output of conditional formatting example

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2.21 Data validation
Data validation prevents entering erroneous data into a
specific cell. These include entering wrong format of data (such
as text vs numbers), range of values, wrong date-time lines, or
specific entry that does not include within a domain, such as a
customer name.
Suppose that we have a form that records credit sales. This
simple form has Date, Customer Name, Item Name, Number
of Items Sold, Item Value, and Total as its fields. Now, we are
going to apply validation rules for each column.

Before continuing, we must create a list of customers and items that will be used in this form.

→ Generate a list of customers with ID and Name.

→ Similarly, generate a list of Items with Code and Name.
→ Sort both lists by Name fields.
→ Note that these lists are not directly below the Credit Sales Form. Otherwise, they
will be on the way of the form entries.
→ If you are going to use a common database of customers and items, it is advisable to
use a separate sheet for each to increase the manageability of the list.

Defining validation rules;

→ First create the table with title row and another blank row. This is important so that
the formatting will be easily propagated automatically with new entries.
→ Click on the cell bellow date to specify a date related validation.
→ DATA DATA TOOLS group . This will bring Data
Validation dialog-box.
→ From the list-box under ‘Allow:’ pick Date.
→ Specify a range of dates or a specific threshold of a date to accept the values from. In
this case, choose ‘greater than or equal to’
→ State the ‘Start Date’ as 12/1/2017.
→ Go to ‘Error Alert’ tab. This is where you specify the customized message to be
displayed if the data input to this cell is violated.
→ Choose ‘Stop’ from ‘Style:’ list-box.

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 → Enter ‘Title’ for the message box (e.g. Invalid Date) and the message to be displayed
in ‘Error message:’ box (e.g. the date you enter cannot be accepted as it is predated
1st of December 2017.).

→ Press OK.
Defining a validation rule from the list such as customers and items must be linked to its
respective lists.

→ Select the cell under customer name

(B3).
→ Go to Data Validation dialog-box.
→ Under ‘Allow:’, choose List.
→ Click in ‘Source:’ and specify the
customer names from which the list
should be constructed. In this
example, it is ‘I4:I10.’
→ Go to ‘Error Alert’ and specify the
error messages as before with
appropriate messages.
→ For the Items too, repeat the above steps and as the ‘Source:’, choose the Item Name
cells (I16:I23).
→ Now you should see a appears under customer name cell as well as item name
cell. You will get the list of customer names and item names automatically into the
list (see Figure 2-20).

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 Figure 2-20: Output of data validation example

When you enter data, you can choose from the list. Since each item has a listed price, when
an item is chosen for a customer, Excel must be instructed to automatically pick the ‘Item
Value’. Student should note that this part is not related to validation directly but helps speed
up entering data accurately.

To achieve this;
→ Make sure that you sort the Items list by ‘Name’ field.
→ Enter the following formula into the cell under Item Value (E3).

→ Populate formatting for the other cells, if needed.

VLOOKUP is a very useful function to find a record from a set of records and return another
value of that record other than the one that is looked for. Note that the above formula has
IFERROR function that checks whether there is an error in the VLOOKUP function. If no error
occurs, Item Value should be automatically filled once you pick the item from the list.

2.22 Printing
Printing of Excel is slightly different from Word due to large number of cells it contains.
Further, Excel does not usually contain page breaks as that can be seen in Word.

2.22.1 Setting a document for printing

→ First set the page size. PAGE LAYOUT Page Setup group and set it to A4.

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→ Then setup orientation. PAGE LAYOUT Page Setup group .
→ Set the page margins. PAGE LAYOUT Page Setup group Set the correct
margins. OR, select .
→ To get the Page Setup dialog box.

→ You can horizontally or vertically center the contents on the page by checking the
respective check-boxes.
→ You can set the Header and Footer for the printing pages in Header/Footer tab. You
can set the page numbers on the pages though the appearing list box.
→ You can also set the printing direction. Since most data flows into many rows and
columns, we must instruct Excel weather the printing order (Page Order) should be
horizontal or vertical.

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If the data being printed flows into multiple pages, there is a need to make the titles of the
columns / rows to be repeated in each page. Such repeating rows can be set in
and columns to be set in boxes respectively from
the Page Setup dialog box.

2.22.2 Viewing a document before printing

There are two views that help you determine the way the document would look like on a
page. Those are Page Layout View and Page Break Preview.

Page layout view

Page Layout View shows the document in printable pages just like in Word. However, this
view does not provide a conducive working environment. Hence, use it when you want to
verify the appearance on hard copies.

→ VIEW Workbook Views group .

→ To revert to normal view, press .

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Page break preview
Page Break Preview shows the page split on the worksheet. Page numbers will let you know
the order of printing and the blue broken lines show the page borders.

→ VIEW Workbook Views group .

→ You can change the page borders by click on the blue lines and move to fit in the place
you wish.

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2.22.3 Printing

Printing operation is not different from Word except for what

to be printed. You need to set the printer and adjust the
printer property specific to that printer.

→ FILE Print. You will see a preview of the document

on the right pane.
→ Select the appropriate option from the print setting menu.

2.23 Chapter summary

This chapter has demonstrated the fundamental uses of Excel. Spreadsheets are widely used
in organizations for many purposes like performing basic calculations, as a planning tool, and
as a basic accounting application. For you to use spreadsheet for these kinds of purposes,
you need to understand the basic operations of Excel such as the concept of cell, addressing
of cells, and working with formulas. It is also common to evaluate various conditions to
decide on a course of actions, which can be done through logical operations. When multiple
conditions to be evaluated, logical operations (AND, OR, XOR, and NOT) must be used to
combine them into a single logical output. Excel has many categories of functions and in this
chapter, we mainly covered a few of commonly used financial functions such as PMT, PPMT,
RATE, and NPER and advanced financial functions such as NPV, IRR and MIRR; as well as a
few statistical operations like obtaining descriptive statistics, correlation analysis, and
regression analysis through the use of Statistical ToolPak. In addition to some fundamental
data operations like sorting and filtering, data validation, conditional formatting have been
discussed. Finally, setting up a worksheet properly for printing is demonstrated.

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