Spreadsheet Models for Managers

If you use Excel to model businesses, business processes, or business transactions, this course will change your life. You’ll learn how to create tools for yourself that will amaze even you. Unrestricted use of this material is available in two ways.

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It resides on your computer, and you can use it anywhere. No need for Internet access.
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 Order "Spreadsheet Models for Managers, on-line edition, one month" by credit card, for USD 69.95 each, using our secure server, and receive download instructions by return email.
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Spreadsheet Models for Managers

 Unwinding circular references
• Simple case:
• Y = 3 - X
• X = 1 + Y
• These are simple, linear simultaneous equations; solution is X = 2, Y = 1
• If you implement X and Y as cells, Excel cannot resolve the solution because you get a circular reference error
• The best approach is to solve the equations symbolically, then implement that solution

Demonstration

Here’s a simple example of a set of simultaneous equations that, if implemented in Excel, produce a circular reference. When you encounter such systems in your models, solve them, and implement the solution instead. Relying on Excel’s capabilities instead of your own, in such cases, might be easier in the implementation stage, but when it comes to actually running the model, you’ll find that there are enormous performance costs.

Understanding Implicit Intersection

Implicit Intersection is one of the most underrated — and at the same time one of the most powerful — techniques in all of Excel. Yet few people truly understand it.

Implicit Intersection is the method by which one cell can retrieve a value from another range by examining the intersection of its row (or column) with that range. If the intersection is unique — a single-cell — then the formula of the cell that depends on implicit intersection can update its value without incident. If not, an error results.

Terminology for Worksheet Functions

When talking about worksheet functions, it’s important to be careful about your choice of terminology. Technology is like that, and like it or not, Excel is a piece of technology.

Cells can have formulas, as we’ve seen, and those formulas can invoke worksheet functions. Cells do not contain functions — rather, they can contain formulas, which, in turn, can invoke one or more worksheet functions.

User-defined names are not functions.

To invoke a worksheet function in the context of a cell formula, one calls a worksheet function. Often, you hear this described as “applying a worksheet function.” Do not use that terminology. For example, we’ll speak of “calling a function on its arguments,” or “calling a function with its arguments.” We do not say that we “apply a function to its arguments.”

When Excel calculates the value of a cell, and that cell’s formula contains a call to a worksheet function, that function call is evaluated. Its value is then returned to the formula, which uses it, in turn, to compute its own value.

Sometimes you hear worksheet functions referred to as commands. They aren’t commands. Commands are found on Excel’s menus, or perhaps in some dialog boxes. Commands do things, like format a cell, or sort a range. Commands don’t return values — functions return values.