Spreadsheet Models for Managers
Getting Access to 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.
- As a stand-alone Web site
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- At this Web site
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Spreadsheet Models for Managers
This reading is especially relevant for Session 1The Ripple Principle
The power of spreadsheets is based on their ability to compute the values of cells that depend on the values of other cells. Without this capability, spreadsheets would be little more than ruled paper with fancy formatting. The fact that the value of a cell can depend on the values of other cells is fundamental to what defines a spreadsheet. In effect, changes in one part of the sheet propagate — or ripple — through the sheet.
In 
this course you’ll come to appreciate many
of the consequences of this Ripple Principle. You probably already understand something about
it, and how it can produce results you want. But we want to take this understanding to a new
level by exploring how to use the Ripple Principle to make your work easier, your models more
reliable, and your results more accurate and maintainable.
As an example of the Ripple Principle, think about a model of a chain of retail stores in which the number of employees per store is a parameter. If this number is stored in a cell, and if all uses of this number are made through references to that cell, then changing the value of that one cell controls the number of employees per store. If, on the other hand, the number of employees per store is introduced into the model explicitly as a number in whatever formula it’s needed, changing the number of employees per store becomes much more difficult. To make such a change, we must chase around everywhere and find the old values hidden in all those formulas, and then edit them.
For this reason, we want you to use the Ripple Principle in all your homework and in the Course Project. Specifically, whenever a homework problem contains a number that you are to use in solving the problem, solve the problem in such a way that if we want to change the value of that number, we can adjust the value of one cell — and only one — in your homework solution. See the first example of Session 1 for an illustration. Here we store the initial headcount in a cell, rather than use the value of the initial headcount in a formula.
If you make a habit of doing your modeling work this way, you’ll someday have a wonderful experience. A time will come when you must change a model, and it will be easy to do — so easy to do, that you’ll be surprised and pleased.
Last Modified: Wednesday, 27-Apr-2016 04:15:26 EDT
The first homework assignment has a fair amount of reading attached to it. Some students feel that the best approach is to read it all, and then try to do the homework. For most of us, such an approach doesn’t work very well.
Before you begin the course, read the general material, such as “Getting Started,” “Software You Need for This Course,” and “How to Work.”
Later, as you begin the homework, let the homework drive your reading choices. For instance, the first homework assignment does require that you master certain techniques. Read “Names” and “The Ripple Principle.” Then, if something confuses you, read up on it: examples are “The Basics of Recalculation” and “References.” Learning something when you need it, and only when you need it, is usually the best way to go.
Parentheses sometimes make a real difference. For instance A1*B1+2 is very different from A1*(B1+2). But A1*(B1*2) is exactly the same as A1*B1*2. When the parentheses don’t make any difference in the value of the result, it’s not usually a good idea to include them. They tend to make the formulas harder to read, and there’s always the chance that you’ll put them in the wrong place. More