MMS 09 Excel Proficiency Reviewpecklund/Duke MBA...Proficiency 6 Excel 2007 Proficiency Assignment: Detailed Task Descriptions Excel Proficiency Review - Detailed Task Descriptions

Excel Proficiency Review

Duke MBA Computer Preparation

The Excel Proficiency Review Focus The focus of this review is on Excel tools that can increase your efficiency and effectiveness as you construct and work with Excel models. These notes are written for Excel Version 2007, the version that will be used for your program.

Skills

Cross-worksheet linking Formula building and copying Built-in functions, especially logical functions Worksheet formatting Auditing Extending built-in lists

The File You Need

To complete the work for this review download the file named ExcelProficiency.xlsx from the class “Review Files” web page. Important Note: When you open the ExcelProficiency.xlsx file, an information message reporting a circular reference will display. This is intentional; click OK to continue past this message and close Excel’s online help if it automatically opens.

Deliverable

Complete the Excel Proficiency Review online quiz. Notes

For your convenience the instructions in this review are divided into these sections: Completing the Review: Summary Descriptions

Short descriptions of the review, useful if you are already familiar with the core skills.

Completing the Review: Detailed Descriptions More detailed descriptions of the review tasks and techniques, useful if you are unfamiliar with the review topics. You may find it helpful to have a good Excel reference guide on hand or to become familiar with Excel’s online help.

A Skills Summary for this Review Model Building Practice

For guided practice with model-building, see the optional modeling practice exercises on this web page: http://faculty.fuqua.duke.edu/~pecklund/ExcelReview/ExcelReview.htm

Excel Proficiency Review Table of Contents

Page Excel Proficiency Review – Summary Descriptions

Task 1: Complete the 4th Quarter Worksheet.......................................................1 Task 2: Addressing and Formula Copying..........................................................2 Task 3: Audit a Worksheet with Errors ................................................................2 Task 4: Calculate Employee Benefits ....................................................................3 Task 5: Extend Excel’s Built-in Lists .....................................................................4 Task 6: Write Three Pricing Formulas ..................................................................5

Excel Proficiency Review – Detailed Descriptions Overview of Worksheets in the Workbook .........................................................6 Task 1: Complete the 4th Quarter Worksheet .....................................................10 Task 1 Self Check .....................................................................................................19 Task 2: Addressing and Formula Copying..........................................................21 Task 3: Audit a Worksheet with Errors ................................................................23 Task 4: Calculate Employee Benefits ....................................................................30 Task 5: Extend Excel’s Built-in Lists .....................................................................34 Task 6: Write Three Pricing Formulas ..................................................................36

Excel Proficiency

Skills Summary ........................................................................................................38 Rev. 5-15-2009

Proficiency 1

Excel Proficiency Review: Summary Task Descriptions

Excel Proficiency Review - Summary Task Descriptions Task 1: Complete the 4th Quarter Worksheet Use the instructions below to complete the “Task 1-4th Q” worksheet in the file ExcelProficiency.xlsx. 1- Complete the identifying information.

Widen columns so all labels display completely. Bold and center the worksheet title. Replace the date prompt with a dynamic date function and make sure the cell

has date formatting. Center the date over the data on the worksheet. Enter your name on the “Prepared by” line. Center your name over the data.

2- Complete the “Actual September” Values in column B.

Reference appropriate cells on the “September Data” worksheet. Calculate September’s Monthly Revenues, Monthly Expenses, and Profit. Derive these and all other numeric values on the worksheet with formulas only (that

is, enter no constant values). 3- Complete Projected Revenue for October through December.

Use the existing formula in Cell D9 as your model; that is: =C14+(C14*'September Data'!C27)

Continue to use September as the base for October through December calculations. For example, make November’s 1st revenue calculation: =C14+(C14*'September Data'!C28)

Calculate projected Monthly Revenues for October through December. 4- Complete Projected Expenses for October through December.

Use the existing formulas as models. Calculate projected Monthly Expenses for October through December.

5- Calculate “Profit” values in Row 27 and complete the “Totals by Item” column.

Include September figures in the profit and totals calculations.

6- Add Formatting Format all worksheet numbers with a thousands-comma-separator, 2-decimal

format. In addition, add dollar currency formatting to the numbers in the “Totals by

Item” column (Column G) and to the values in the “Monthly Revenues”, “Monthly Expenses”, and “Profit” rows.

End of Task 1 Summary Description

Proficiency 2


Task 2: Addressing and Formula Copying Make the “Task 2 – Table” worksheet current. Complete the 10 X 10 multiplication table on that worksheet by entering a single formula in the upper left hand corner of the table structure and copying that single formula to the rest of the cells in the table. Do not make any changes to the formulas in the copied cells. Make use of absolute, relative, and/or mixed addressing in the master formula as appropriate. Check

End of the Task 2 Summary Description

Task 3: Audit a Worksheet with Errors Make the “Task 3 - Auditing” worksheet current. Perform these operations on that sheet: 1- Apply a shaded background to format any cells containing Excel error values. Then use the tools on Excel’s Auditing toolbar to: 2- Trace precedents for September Monthly Revenues. 3- Trace dependents for October Internet Access Subscriptions. 4- Correct the circular reference being used to calculate the maximum revenue projection

(Cell G5) by replacing the formula in that cell with the constant value 10%. 5- Set up the “Watch Window” to track 3 or more formulas in the worksheet. Note: Only the shaded error cells and the correction to the circular reference will remain after you save and close your file.

End of Task 3 Summary Description

Completed table (without formulas displayed).

Proficiency 3


Other plan?

Individual?

No health benefit

Family? $10K coverage

$8K coverage

Yes No

No

Yes

Yes

Start

Task 4: Calculate Employee Benefits Make the “Task 4 - Benefit Calculations” worksheet current. Write formulas to complete the records in Columns G, H, and I in that sheet. 1- For the “# Years Employed” calculation use Excel’s YEAR and TODAY functions. 2- For the “Retirement Contribution” calculation use Excel logical functions and the

requirements displayed in the flowchart below.

3- For the “Health Plan Cost” calculation use Excel logical functions and the

requirements displayed in the flowchart below. Use the text “$10K”, “$8K”, or “None” as results in the formula you build for the Health Plan Cost column.


Full Time?

>=2 yrs employmt?

Benefit=Salary * 4% No retirement benefit

Yes

Yes

No

No

Start

Proficiency 4


L1 Task 5: Extend Excel’s Built-In Lists Make the “Task 5 – Lists” worksheet current. Using Excel’s built-in lists, extend the first six values (in Cells C6:H6 with headers January through Quarter 1) down eleven rows. Extend the Monday header in Cell I6 down the column using weekdays only. For the weekdays-only list extension: Check A partial view of the completed worksheet is illustrated below.


The result with “Fill Weekdays” selected will look like the illustration at left. Weekend days are ignored.

Proficiency 5


Your completed formulas should result in the cost figures shown at left.

Task 6: Write Three Pricing Formulas Make the “Task 6-Olive Oil” worksheet current. On this worksheet, wholesale extra virgin olive oil is priced in two tiers:

Tier 1: €28.00 /liter Quantities up to and including 500 liters Tier 2: €20.00 /liter Quantities of 501 or more liters Write a formula to calculate the cost of 1600 liters and copy the formula to calculate the cost of 483 liters and 2001 liters. Check


End of the Excel Proficiency Review Summary Task Descriptions

Proficiency 6

Excel 2007 Proficiency Assignment: Detailed Task Descriptions

Excel Proficiency Review - Detailed Task Descriptions Overview Open your copy of the ExcelProficiency.xlsx workbook and take a look at its worksheets. Each sheet is briefly described below. September Data This worksheet holds service, revenue, and expense data for a company named InterConnect, Inc. for the month of September. Also on that worksheet are values to be used to project (estimate) service, revenue, and expense figures for the upcoming fourth quarter months of October, November, and December. Think of this worksheet as a library of values for the adjacent “Task 1 – 4th Q” worksheet. Task 1 - 4th Q This worksheet’s is set up to show revenue and expenses for InterConnect, Inc. for September as well as projected values for the 4th quarter (the months October through December). The worksheet contains some of the actual September values from the “September Data” worksheet along with a few projected values calculated for October.

Proficiency 7


Task 2 - Table This exercise requires a good understanding of Excel’s absolute, mixed, and relative addressing in copying worksheet formulas. Task 3 - Auditing In this exercise you use tools on Excel’s Auditing toolbar.

Proficiency 8


Task 4 - Benefit Calculations This exercise tests your ability to write branching model formulas.

Task 5 - Lists This exercise illustrates the use of Excel’s built-in lists.

Proficiency 9


Task 6 – Pricing The construction of logical functions is the basis for this exercise.

End of the workbook overview.

A detailed description of tasks follows. You may want to have a good Excel reference guide on hand as you work through the exercises. Of course Excel online help is always

available as well. Note For additional optional guided practice with Excel model-building, see the modeling practice exercises on this web page:

http://faculty.fuqua.duke.edu/~pecklund/ExcelReview/ExcelReview.htm

Proficiency 10


For example, the formula in Cell C14 gets its value from Cell C13 on the “September Data” worksheet.

Task 1: Complete the 4th Quarter Worksheet Make the “Task 1 – 4th Q” worksheet current. In this worksheet the basic layout is already established. The sheet contains labels along with two values and two formulas. Note that the two values — the actual September “Internet Access Subscriptions” and “Salaries” — are not entered as constants but are references to cells on the September Data worksheet. The two already-completed expense formulas — projections for October and November Salaries — contain formulas that reference values on the September Data worksheet. Cross-worksheet referencing allows key values to be entered in a single location in a worksheet and then be referenced from cells on that and other worksheets. If a change must be made to a key value, it can be made only once, in the single location in which that key value is entered. The values in any cells that reference the changed key value automatically change. For example, Cell D5 in the “September Data” worksheet holds the value 1,523 as a subscription number. Several formulas in the workbook depend on that number. If subscriptions increase (or decrease), the value in Cell D5 can be updated and all the formulas on which that value depends also update. 1. Begin by Completing the Worksheet Identifying Information Begin working on the “Task 1-4th Q” worksheet by widening columns as necessary so all the worksheet’s labels display completely. In Cell B8 replace the [current date] prompt with Excel’s TODAY function to retrieve today’s data dynamically. Make sure this cell displays as a date. Add your name to the “Prepared by“ line.

Proficiency 11


Bold the worksheet title (InterConnect, Inc.) and center it over the data area. Use the “Merge and Center” button on Excel’s Formatting toolbar to make this process easy (example below). To merge and center the InterConnect, Inc. title, for example, select the cell holding the text InterConnect, Inc. along with the five cells to the right of it (in this example, Cells B6:G6). On the “Home” tab of the ribbon, choose the “Alignment” section and the “Merge & Center” button. Excel merges the six cells together into a single cell and automatically centers the text in the middle of the single cell. Center the other three title lines over the data (“Budget Projection”, date, and prepared by) in the same way. (Note: The “Merge and Center” works on only one row at a time.) Intermediate Check

2. Complete the “Actual September” Values in Column C Two values in Column C on the “Task 1-4th Q” worksheet already are completed for you as a model for completing the other values: Under the Revenue header 45,690.00 already appears for “Internet Access

Subscriptions”. The content of that cell is this formula: ='September Data'!C13

Proficiency 12


Fill Box

Under the “Expenses” header 6,500.00 already appears for “Salaries”. The content of that cell is this formula: ='September Data'!C19

Complete the “Task 1-4th Q” worksheet values for the revenue and expense entries in the “Actual September” column (Column C) by using similar formulas to reference the appropriate cells on the “September Data” worksheet.

For this section of data the two worksheets have an identical layout. Because the layouts are the same you can copy the existing formulas down the column (C14 to C15:16 and C20 to C21:C24) by dragging the right-hand-corner fill box. This is a more efficient way to add the additional cross-worksheet formula references to the worksheet than by entering each formula reference individually. Sum Monthly Revenues and sum Monthly Expenses. Calculate Profit as Revenues minus Expenses.

Proficiency 13


3. Complete Projected Revenue for October - December Next, complete the projected revenue figures for October, November, and December.

The projected October “Internet Access Subscriptions” value is completed for you as a model. The October number 47,974.50 is derived by a formula that uses a value from the September Data worksheet, as shown here:

=C14 + (C14 * 'September Data'!C27) Look at Rows 27 through 29 on the “September Data” worksheet. The percentage numbers in the “Revenues” column for October, November, and December represent revenue percentage increase assumptions for those months over the actual September values. The 4th Quarter projected October revenue value for “Internet Access Subscriptions” is calculated as that item’s revenue for September multiplied by the “September Data” worksheet’s revenue projection percentage for October, or 5%. Although one could write this formula =C14 + (C14 * 5%), entering the percentage value directly in the formula would forfeit the flexibility provided by using a cross-worksheet reference. By using a cross-worksheet reference, if you change the 5% revenue projection for October to some other value, you would not need to rewrite any of the model formulas that use that value.1 Complete the projected October through December Revenue figures on the 4th Quarter sheet using as your model the Cell D14 formula:

= C14 + (C14 * ‘September Data’!C27) 1 For this exercise do not change the October revenue increase projection from 5%.

Proficiency 14


Important In your calculations for each projected month’s values, use the September values as

your base. That is, for all October, November, and December calculations use the corresponding September values — not the previous month’s values — in your calculations. So, for example, the formula for November “Internet Access Subscriptions” should reference C14, September’s figure for that item.

Note the arrangement of the projection percentages on the “September Data”

worksheet. The Revenue projection percentages are different from the Expense projection percentages. And the percentage values vary by month; they’re not the same for October, November, and December. As you create your “Task 1 - 4th Q” worksheet formulas be sure to reference the correct “September Data” cells.

With your “4th Quarter” formulas built in this way, if you must change the “master” projection figures on the September Data worksheet, the figures on the “Task 1 - 4th Q” worksheet remain valid. This structure allows you to more easily use your worksheet model for “what if” analysis. Intermediate Check Your formulas for Actual September, Projected October, and Projected November might look like the ones below.

(Display formulas by using the toggle key combination CONTROL+`.)

Proficiency 15


Tips: Efficient Formula Construction Techniques

To copy a formula from one cell to another exactly without having to add absolute addressing to the copied formula, use this technique:

Make the cell with the master formula the current cell and drag over the cell’s formula as it appears in the formula bar.

Choose Edit, Copy (or CONTROL+C) to copy the formula bar text, then hit the ESCAPE key to leave the master cell formula “as-is”.

Click the cell you want to copy the formula to and choose Edit, Paste (or CONTROL+V), then ENTER. The formula is copied exactly.

For example, you might use this technique to copy the existing October “Internet Access Subscriptions” formula (Cell D14) to the cell for November (Cell E14). Remember to modify the November formula to reference the November projection percentage value on the “September Data” worksheet. Your modified formula might look like this:

=C14+(C14*'September Data'!C28) If you copy this formula down the November column for Revenues, the formula references to the September values will automatically change appropriately. That is, the formula that calculates November “E-Mail & Bulletin Board Service” will reference Cell C15 and the formula that calculates November “Web Page Disk Space Rental” will reference Cell C16. Your reference to “September Data” Cell B28 however, will also change automatically as you copy the initial formula down the revenue items column, an effect you don’t want. See how to correct this, below.

Use absolute addressing to “fix” a cell reference in a formula you plan to copy. For

example, if the “Task 1 - 4th Q” worksheet Cell E14 contains this formula:

=C14+(C14*'September Data'!C28)

where C28 references the November projection percentage value, modify the reference to ‘September Data’!C28 to make Cell C28 an absolute reference before copying the formula down the November column. Your modified formula should look like this:

=C14+(C14*'September Data'!$C$28)

To quickly change a reference from relative to absolute, click inside the reference in the formula bar and hit the F4 key toggle.

To quickly complete the formulas that total Monthly Revenues, leave the initial formulas you wrote for the September column with the default relative references. Then copy each “master” formula across its row to complete the formulas for the October, November, and December columns.

Proficiency 16


Tip: Efficient Formatting Technique

To format several worksheet cells in the same way, apply formatting to at least one cell. Then, extend the formatting by doing the following:

1) Make the cell with the correct formatting the current cell. 2) Right-click to see the context menu and the context toolbar with its Format

Painter button. 3) Click the Format Painter button.

4) Drag over the cells to which you want the same formatting added.

Note: If the cells you want formatted are not adjacent to one another, double-click the Format Painter button to toggle it on in “persist” mode, then click any individual cells and/or ranges you want formatted. When you’ve applied formatting to all the cells you want, hit the escape key to turn off the Format Painter.

Intermediate Check With the actual and projected formulas and the Monthly Revenue sums in place, your “4th Quarter” worksheet should show these values for Revenues:

Selected cell.

Proficiency 17


Troubleshooting If your numbers don’t match the sample above: If you copied formulas, did you use absolute and relative addressing appropriately

in your “master” formula? If you didn’t use absolute and relative addressing, did you correct the references in the copied formulas so they reference the correct cells?

Are you correctly referencing the September Data worksheet’s September values in the formulas for October, November, and December? Or for each month are you (incorrectly for this task) referencing the previous month’s values?

Are you referencing the correct projection percentages for revenues from the September Data worksheet? Each one of the 4th quarter months has its own projection percentage value. For example October’s projection percentage value can not be used for November calculations.

4. Complete “Task 1 - 4th Q” Expenses Using the same techniques you used for the Revenue entries, complete the entries under the Expenses header for October through November for “Salaries”, “Rent”, “Equipment Maintenance”, “Advertising”, and “Operating Costs”. As you did for the Revenue figures, again use the “master” projection assumption figures located on the “September Data” tab in your calculations. This time, however, reference the October through November expense figures located in that worksheet in Cells D27:D29. To get you started, the formula for October’s projected increase for Salaries (Cell D20) has already been completed.

Proficiency 18


Intermediate Check Your actual and projected expense figures should match the ones below. 5. Complete “Profit” and “Totals” and Add Formatting To finish up the “4th Quarter” worksheet:

a) Calculate values for “Profit “(Row 27).

b) Generate the formulas for “Totals” (Column G). Include the actual September figures in your total calculations for each row.

c) Format the all numeric values in the worksheet with the thousands comma separator and two decimal places.

d) In addition, add currency formatting to the values in the “Totals” column and to the values in these rows: “Monthly Revenues” (Row 17), “Monthly Expenses” (Row 25), and “Profit” (Row 27). You may want to add additional formatting to the worksheet (for example, to worksheet headers), but no additional formatting is required for this task.

e) Make sure all columns are wide enough to display their contents completely. Task 1 Final Check The results of your Profit calculations should match the values below. All the numeric values on the worksheet should be the result of formulas. That is, enter no constant numbers to get a value for any of these cells.

Headers are fixed.

Proficiency 19


Troubleshooting If your numbers don’t match the Check illustration above: Recheck the formulas you’ve entered on the “Task 1 - 4th Q” worksheet and make

sure you’re linking to the proper cells on the September Data worksheet.

If you completed your worksheet by copying formulas, check to see that you correctly applied absolute and relative addressing.

Make sure you haven’t inadvertently changed any of the original expenses percentage values on the September Data worksheet.

End of the Task 1 Detailed Description Task 1 Self-Check: Answer Two What-If Questions Because your formulas on the “4th Quarter” sheet are constructed using cross-worksheet references, you can easily use the worksheet to conduct a “what if” analysis. If you change a master value on the “September Data” worksheet, a corresponding change to what appears on the 4th Quarter worksheet should be both automatic and immediate. Make changes to the “September Data” worksheet to answer the two questions below. The first question

What is total revenue if the monthly service charges for Internet access, e-mail & bulletin board service, and web page disk space rental are raised from $30, $5, and $75.50 to $35, $10, and $100 respectively? That is:

Service Original Value What If Value Internet access $30 $35

E-Mail $5 $10 Bulletin Board service $75.50 $100

To answer this question, change the “September Data” worksheet values to the “what if” values. The answer to this question is the Cell G17 total revenue value on the “4th Quarter” worksheet.

Proficiency 20


The second question On the 4th Quarter worksheet what are the total expenses if the October, November, and December expense projection percentages are raised from 5%, 5%, and 12% to 7%, 8%, and 15%, respectively? That is:

Month Original Value What If Value October 5% 7%

November 5% 8% December 12% 15%

To answer this question, change the “September Data” worksheet values to the “what if” values. The answer to this question is the Cell G25 total expenses value on the “4th Quarter” worksheet.

End of the Task 1 Self-Check

Proficiency 21


Task 2: Addressing and Formula Copying This task tests your understanding of Excel addressing and formula copying. Copying formulas is an efficient model-building technique. It is critical to understand Excel’s relative, fixed, and mixed addressing when copying formulas so the copies give you the results you intend. Open the “Task 2 - Table” worksheet in the ExcelProficiency.xlsx workbook.

In the space provided on that worksheet, fill in the cells to create the 10 X 10 multiplication table, as shown below.

Complete the table by entering a single formula in the upper left-hand cell (Cell C10) and copying this single formula to all the other cells in the table. The key to the task is to design the initial formula so it works for all the cells in the table. Building a single formula and copying it to all the worksheet cells requires building correct cell referencing into the single, “master” formula. The rules of this exercise are that you may NOT

complete the table by entering the correct numbers as constants in their cells. complete the table by writing more than a single formula. modify the upper-left-hand-cell master formula in any way as you copy it.

Proficiency 22


Suggestions Lets say you start by entering the formula =B10 * C9 in Cell C10. Although this formula gives the correct answer for Cell C10, when it’s copied down Column C (and across the columns of the table) most of the results will be incorrect. The partial illustration (previous page) shows the unhappy result if you attempt to use this incorrect formula to fill the table.

Consider modifying the formula =B10 * C9 to this variant: =$B10 * C9 That is, use mixed addressing in the first cell reference ($B10) that fixes the column but leaves the row relative. When this formula is copied down and across the partial illustration at left shows the results. Again, the results are incorrect; however they’re closer than before.

Continue to work with the master formula until you’ve found the correct form of addressing for the references B10 and C9. As you work with the master formula in Cell C5, recall Excel’s three cell referencing options:

Name Example

Result

Relative referencing A1 Fixes neither column nor row when used in a copied formula.

Absolute referencing $A$1 Fixes both column and row when used in a copied formula.

Mixed referencing $A1 or A$1

Fixes column but not row or fixes row but not column when used in a copied formula.

When you have your master formula written correctly, copy it down and across (or across and down) to complete the table.

End of the Task 2 Detailed Description

Proficiency 23


Task 3: Audit a Worksheet with Errors Make “Task 3–Auditing” the current worksheet. Remember that when you initially opened the ExcelProficiency03.xls file the information message shown below displayed. This message describes an error in the “Task 3-Auditing” worksheet: A formula with a circular reference.

You were instructed to click OK to close the message and start working with the workbook. The “Task 3 – Auditing” worksheet looks like the illustration below.

The “Auditing” worksheet, with two errors and a circular reference included.

Proficiency 24


Proceed with this task as follows: 1. Add a shaded background to format any cells containing Excel error values. Two cells in the worksheet contain Excel error messages. A quick way to select them both at once is to:

a) Click the F5 key to open the “Go To” dialog.

b) Click the Special button at the lower left of that dialog to open the “Go To Special” dialog.

c) In the “Go To Special” dialog choose Formulas.

d) Beneath the formulas choice, toggle off all options except Errors.

e) Click OK.

Excel makes current all cells that contain Excel error messages. In this worksheet, C30 and D20 are selected.

Proficiency 25


Format those two cells with a shaded background. To add formatting to the selected cells, choose the “Home” tab and the “Font” group. Click the “Fill Color” button’s drop-down arrow to see a “Theme Colors” dialog of color choices. Select a color. Intermediate Check The selected cells in the worksheet are shaded with that color.

2. Trace precedents for September Monthly Revenues. Click Cell C20, the cell that holds “Monthly Revenues” for September. On the “Formulas” tab go to the “Formula Auditing” group and click the “Trace Precedents” button.

Excel draws a blue line through any cells whose values are used in the SUM formula in Cell C20. The end of the line is an arrow pointing to Cell C20.

Trace Precedent arrows provide a quick visual way to see how values are related in a worksheet. Any number of trace precedents arrows can be added when reviewing a worksheet.

Proficiency 26


3. Trace Dependents for an October Revenue Item Click Cell D17, the cell holding the October revenue for “Internet Access Subscriptions”. Again go to the “Formulas” tab and the “Formula Auditing” group. This time click the “Trace Dependents” button. Excel draws a blue arrow from that cell to any cells containing formulas that reference that value. Here, the October Profit formula in Cell D30 uses the October Internet Access Subscriptions revenue value in D17.

4. Correct the Circular Reference (Cell G8) “Task 3-Auditing” contains a formula that has a circular reference. A circular reference is a formula that is calculated by referring back to its own value, either directly or indirectly. Most spreadsheet circular references are inadvertent errors2. Excel 2007 displays the cells involved in a circular reference by joining them with blue arrows. Double-click the blue arrows to review each involved cell.

2 A circular reference may occasionally be written deliberately. In this case, the circular reference is controlled through the “Calculations” tab of the “Options” dialog (Tools, Options, choose “Calculations” and toggle on “Iteration”). Excel calculates each value involved in the circular reference using the results of the previous iteration.

Involved Cell Contents C6 =G9 G8 =C6+(C6*0.02) G9 =AVERAGE(G7:G8)

Proficiency 27


To find and correct the circular reference in this worksheet, click the “Formulas” tab and go to the “Formula Auditing” group. Choose the “Trace Dependents” button drop-down and choose “Circular References”. Excel displays a list of cell references; the circular reference is marked with a check.

The formula causing the problem is the one that calculates the maximum revenue projection index in Cell G8: =C6+(C6*0.02) The formula attempts to calculate its value by referring to itself. Notice that the result of the calculation displays as a zero in the worksheet. Replace the formula in Cell G8 with the constant 10%. Excel immediately:

Removes the Circular Reference arrows from the workspace. Recalculates the values in the involved formulas. Now, the Average in Cell G9 is

8%, also reflected in Cell C6.

5. Use the “Formula Auditing” toolbar’s “Watch Window” Tool The Formula Auditing toolbar’s “Watch” window keeps track of worksheet formulas even when the cells holding them are out of view. Use the Watch window to watch just the formulas in a worksheet you want to track or to watch all the formulas in a worksheet.3

For this part of the task, select all the cells in the worksheet that hold formulas. A quick way to do this is to click the F5 button we used earlier to open the “Go To” dialog, choose the Special button to open the “Go to Special” dialog, choose Formulas, and click OK. Excel selects all the cells in the worksheet that hold formulas. Excel highlights all the worksheet cells that hold formulas.

3 Note that this part of the task does not change worksheet values.

Proficiency 28


On the “Formulas” tab, go to the “Formula Auditing” group and click the “Watch Window” button. Excel opens a “Watch Window” dialog to track the current location, name, formula, and content of each one of the selected cells.

The “Watch Window” floats on top of the Excel workspace. It can be moved or sized in any way that’s convenient. Select any entry and click the “Delete Watch” button at the top of the dialog to stop watching that cell and to delete it from the list in the window. Select any cell and click the “Add Watch” button at the top of the dialog to begin watching that cell and add it to the list in the window. As you would expect, a change in the value of a tracked cell or formula changes the display in the “Watch Window”.

This part of the task requires no change to the worksheet on your part. It is simply an opportunity to experiment with this tool.

Proficiency 29


Task 3 Check The worksheet showing shaded error cells, trace precedent and dependent arrows, the Watch Window, and the corrected circular reference looks like the illustration below.

Your final “Task 3 – Auditing” worksheet If you have the “Watch Window” open, close it. Note that when you save and close your ExcelProficiency.xlsx file, all auditing markers are automatically erased.


Proficiency 30


Task 4: Write Formulas using Excel Logical Functions to Calculate Benefits The Excel logical functions IF, AND, OR, and NOT are often useful when constructing formulas in spreadsheet models. Knowing how to nest IF functions and combine logical functions extends your range of options when building Excel models. These logical functions are described in the table below. Syntax

Description

Example

Returns

=IF(logical condition, If-True, If-False)

Tests the condition and if true returns the If-True value, else returns the If-False value.

Assume: A1=100 A2=50 =IF(A1>A2, “Larger”, “Smaller”) =IF(A2>A1, “Larger”, “Smaller”)

Larger Smaller

=AND(logical condition 1, …logical condition 30)

Returns TRUE if all conditions evaluate to true. Returns FALSE if one or more conditions evaluate to false.

Assume: A1 = 100 A2 = 50 =IF(AND(A1=100,A2=30), A1*2,A1) =IF(AND(A1=100,A2=50), A1*2,A1)

100 200

=OR(logical condition 1, …logical condition 30)

Returns TRUE if any condition is true. Returns FALSE if all conditions evaluate to false.

Assume: A1 = 1st Year A2 = 2nd Year =IF(OR(A1=”PhD”, A2=”2nd Year”) “Current”,”Alum”) =IF(OR(A1=”Class 09”, “Class 10”) “Current”, ”Alum”)

Current Alum

=NOT(logical condition)

Reverses the value of its argument.

Assume: A1 = 1st Year A2 = 2nd Year =IF(NOT(A1=”1st Year”), “Class of 10”, “Class of 09”) =IF(NOT(A1=”PhD”), “Class of 10”, “Class of 09”)

Class of 09 Class of 10

Proficiency 31


Open the “Task 4 - BenefitCalculations” worksheet tab in the ExcelProficiency03.xls workbook. Write three Excel formulas to complete data for the columns G, H, and I:

# Years Employed Retirement Contribution Health Plan Cost

For the “# Years Employed” column calculations, use Excel Date-Time functions. For the “Retirement Contribution” and “Health Plan Cost” column calculations, use Excel logical functions. For each of the three columns, construct a “master” formula in the first cell of the column and then copy the master down the column. More below on the formulas you need. 1. Write the “# Years Employed” Calculation

The “# Years Employed” values are necessary in order to properly calculate the values in the “Retirement Contribution” column. Use Excel’s built-in YEAR and TODAY functions for this calculation, as in: =YEAR(TODAY())- YEAR(reference_to_Hire_Date_cell) So, for example, the formula for Cell G7 would be: =YEAR(TODAY())-YEAR(F7) Double-click the fill box in the lower right-hand-corner of Cell G7 to automatically copy its formula (with a relative reference) through Cell G15.

Intermediate Check Lin and Lyons have been employed nine years. Fu has been employed two years.

Including the proper parentheses is a critical element of writing this

formula.

Proficiency 32


2. Write the “Retirement Contribution” Calculation The company contributes to each eligible employee’s retirement plan at the rate of 4% of the employee’s annual salary. To be eligible for this benefit, an employee must have full-time status and two or more years of employment. So the calculation for the retirement contribution requires a test of two conditions: Full- or part-time status and number of years of employment. A graphical view of the conditions to test is illustrated below.

As shown above, your “Retirement Contribution” formula must be written to handle these three possibilities:

1. An employee works full time AND has been employed two or more

years. The retirement benefit applies. 2. An employee works full time but has NOT been employed two or more

years. The retirement benefit does not apply. 3. An employee does NOT work full time. The retirement benefit does not

apply. In this case, it’s immaterial how many years the employee has been employed.

Use a single formula to handle these three possibilities. In each cell of Column H, your formula should return either the amount of the benefit (the employee’s salary multiplied by 4%) or the words “No benefit”. Write the master formula for the “Retirement Contribution” in Cell H4 using Excel logical functions and copy the formula down the column.

There is more than one correct form this formula might take. For example, both the IF and AND statements could be used or the formula could be written using a nested IF statement.

Full Time?

>=2 yrs employmt?

Benefit=Salary * 4% No retirement benefit

Yes

Yes

No

No

Start

Proficiency 33


Intermediate Check Employees Fu, Hashimoto, and Ortega currently do not receive a retirement contribution benefit. Of the remaining six employees who do receive the benefit, Thomas currently receives the highest benefit level of $5,800. 3. Write the “Health Plan Cost” Calculation

The company supplies two health plan options: 1. Up to $10,000 of annual coverage for employees who choose the family plan. 2. Up to $8,000 of annual coverage for employees who choose the individual plan. These benefits do not apply if the employee or the employee-and-family is already covered by another health plan. The formula to calculate health insurance requires a test of three conditions: Individual, Family, or Already Covered. A graphical view of the conditions to test is illustrated below.

Write a single formula to handle these three possibilities. In each cell of Column J, your formula should return either the amount of the benefit (written as the text “$8K” or the text “$10K”) or the word “None”. Write the master formula for the “Health Plan Cost” in Cell J7 using Excel logical functions and copy the formula down the column.

Notes Any text used as a parameter of an Excel IF statement must be enclosed in double quotes. A simple example: =IF(A1>10, “Benefit”, “No benefit”). To return a value like $8K from an IF statement, either treat the value as a number and custom pre-format the cell in which the formula is located or treat the value as a text value in the IF statement. A simple example with currency value parameters treated as text: =IF(A1>10, “$10K”, “$8K”).

Other plan?

Individual?

No health benefit

Family? $10K coverage

$8K coverage

Yes No

No

Yes

Yes

Start

Proficiency 34


Intermediate Check Three employees currently receive $8,000 in health plan coverage, five receive $10,000 in coverage, and one receives no coverage.


Task 5: Extend Excel’s Built-In Lists For this task make the “Task 5 - Lists” worksheet current. Using Excel’s custom lists feature, extend the first six values (in Cells C7:H7 with the headers “January” through “Quarter 1”) down eleven rows. A quick way to do this is to select the range C7:H7, put the cursor on the filled box in the right-hand corner of the selected range, hold down the left-hand mouse button, and drag down 11 rows. Intermediate Check Excel has several built-in lists. It uses these lists to automatically extend the values in Row 7 to the rows beneath, as shown in the partial illustration below.

Select the fill box and drag down with the left-hand mouse button.

Proficiency 35


Right-click the fill handle and drag down to open a special context dialog with a “Fill Weekdays” option.

Excel’s built-in lists are available by clicking the Home button, choosing Excel Options (a button at the very bottom of the drop-down that displays), then “Popular”. On the “Popular” page choose the Edit Custom Lists button.

Excel opens the “Custom Lists” dialog. In this dialog you can examine the existing, built-in lists and add your own lists. There is no need to create additional lists as part of this review.

Weekdays Only For Column J, extend weekday values (excluding Saturday and Sunday). Extending the list of weekdays only requires a slightly different drag technique from the one above. To repeat weekdays only, depress the right mouse button while dragging down the fill handle at the right-hand lower corner of the cell holding the value “Monday” (Cell J7). A context menu automatically displays that allows you to choose “Fill Weekdays”.

Home

Proficiency 36


Your completed formulas should result in the cost figures shown at left.


Task 6: Write Three Pricing Formulas For this task, make the “Task 6-Olive Oil” worksheet current. Wholesale virgin olive oil is priced in two tiers: Tier 1: €28.00 /liter Quantities up to and including 500 liters Tier 2: €20.00 /liter Any additional quantity over 500 liters Using the IF function, write three formulas in the worksheet (in Cells E18, E20, and E22) to calculate the cost of the three different quantities shown: 1,600 liters, 483 liters, and 2,001 liters. Check Your completed formulas should result in the cost figures shown below. As you write your formulas, recall that the IF function syntax is:

=IF(test-condition, value-if-condition-true, value-if-condition-false)

The result with “Fill Weekdays” selected should look like the illustration at left.

Proficiency 37


For your convenience and to help make the formulas you construct more readable, several key cells in this worksheet have been range-named for you.

Cell D11 is range-named First500 Cell E11 is range-named Price_for_500 Cell E12 is range-named Price_for_Over500

Write the formula to calculate the cost of the first quantity. If you’ve written the formula using best practices for Excel formulas, you should then be able to copy the formula down the column to calculate the costs for the second and third quantities. The construction of your first formula in Cell E18, for example (expressed as both text and using the pre-existing range names and where the word “quantity” refers to Cell C18)4, might look like this: =IF(quantity<=First500, quantity * Price_for_500,

(quantity-First500) * Price_for_Over500 + (quantity * Price_for_500)) Final Check There are a number of different ways to correctly write the formula for this task. The cost of 1,600 liters is €36,000; the cost of 483 liters is €13,524; and the cost of 2,001 liters is €44,020.


End of the Excel Proficiency Review Detailed Task Descriptions

4 That is, this example does not show exactly how to write the formula, but instead shows the logic of the formula required for this calculation.

Proficiency 38

Excel Proficiency Review Skills Summary

Excel Proficiency Review Skills Summary Merge and Center Text in a Worksheet

To have Excel automatically merge cells and center text inside them, use the “Merge and Center” button in the “Alignment” group on the “Home” tab of the ribbon.

Note: “Merge and Center” can handle only one row at a time.

Reference a Cell in another Worksheet in a Formula

1) In the worksheet that is to hold the formula’s results, type an equals sign. 2) If the formula references any cells in the worksheet, reference them as usual. 3) To reference a cell on another worksheet as part of the formula, click the other

sheet’s tab to select it, then click the cell to reference. Excel automatically includes a reference both to the other worksheet name and to the clicked cell.

For example: =A1 + (A1 * 'Other Worksheet'!B20)

If you prefer to enter the reference instead of using the “point and click” method, note that you must include a single quote around the other worksheet’s name followed by an exclamation mark, and then the cell reference.

Copy a Master Formula across a Row

Many worksheets require variations of the same formula. It saves time to build a “master” formula and then copy it to the other cells that require it. In the example below, a master SUM formula is built in Cell B12 to sum September values. Then that formula is copied across Row 12 to cells C12, D12, and E12.

Proficiency 39


A fast way to accomplish the copy operation is: 1) Select the cell holding the “master” formula. 2) Hover the mouse pointer over the “fill box” at the lower right-hand-corner of the

selected cell. The mouse pointer changes to a heavy crosshair shape.

4) Drag the fill box across the row. Excel fills the adjacent row cells with appropriate versions of the master formula.

Excel Relative, Absolute, and Mixed Addressing

Excel’s Relative, Absolute, and Mixed addressing are important under two conditions: 1) You are working with a formula that references one or more other cells. 2) You plan to copy that formula. Excel’s default is Relative addressing. In the example above, copying the Monthly Revenues formula across Row 12 results in formulas that look like this: =SUM(B9:B11) The “master” formula =SUM(C9:C11) =SUM(D9:D11) =SUM(E9:E11) Should you need to fix a cell reference in a master formula so the reference does NOT change even when the formula is copied, do so by inserting dollar signs in front of the reference row and column to make the reference absolute. For example, $A$1 is an Absolute reference. Should you want to fix ONLY a row or ONLY a column in a formula to be copied, insert a dollar sign in front of the row part of the reference or in front of the column part of the reference. For example $A1 or A$1 are examples of Mixed references. To quickly toggle a reference between the four possibilities(relative to absolute to mixed-with-row-fixed to mixed-with-column-fixed) click inside the reference where it appears in the formula bar and click the F4 key. Repeatedly clicking this key cycles through the four possibilities. Relative, Absolute, and Mixed Addressing summary: Name Example Result

Relative referencing A1 Fixes neither column nor row when used in a copied formula.

Absolute referencing $A$1 Fixes both column and row when used in a copied formula.

Mixed referencing $A1 or A$1 Fixes column but not row or fixes row but not column when used in a copied formula.

Fill box

Formulas automatically adjusted to reference the correct column.

Proficiency 40


Display Formulas in a Worksheet Move from “regular” display to formula display and back using this power keystroke toggle:

Depress the CONTROL key and tap the tilde (~) key. Excel’s Formula Auditing Tools

Excel includes a set of tools that can help you trace and audit operations in a worksheet. Look for these tools on the “Formulas” tab of the ribbon in the “Formula Auditing” group.

Excel’s Built-in Functions Excel contains a library of built-in functions, pre-written formulas you can employ in your own spreadsheets. On Excel’s “Formulas” tab look in the “Function Library” group. To open Excel’s “Insert Function” dialog, click the “Insert Function” button (fx) in this group.

In the “Insert Function” dialog functions are listed alphabetically, or choose a category to see a subset of functions. Categories include financial, date & time, math & trig, statistical, lookup & reference, database, text, logical, and information. (If you write your own functions they’re stored in the “User Defined” category.) When you select a function from the list, the function’s basic syntax is shown at bottom of the dialog.

All functions have this syntax: FUNCTION-NAME(parameters) When entered into a worksheet cell, type an equals sign before the function name. Most – but not all – functions have parameters inside their function’s parentheses. Multiple function parameters are separated by commas. Many functions have both required and optional parameters. Function examples: =AVERAGE(A1:A32, B5:B12, C18) =IF(Total > PriceBreak, Total – (Total * 10%), Total) =TODAY() Click the link for “Help on this function” to open online help with explanations and examples of use.

Proficiency 41


A Summary of Excel’s Primary Logical Functions Excel has a family/category of logical functions that are especially useful when constructing formulas to express model relationships. The IF, AND, OR, and NOT logical functions are described and demonstrated below. Syntax

Description

Example

Returns

=IF(logical condition, If-True, If-False)

Tests the condition and if true returns the If-True value, else returns the If-False value.

Assume: A1=100 A2=50 =IF(A1>A2, “Larger”, “Smaller”) =IF(A2>A1, “Larger”, “Smaller”)

Larger Smaller

=AND(logical condition 1, …logical condition 30)

Returns TRUE if all conditions evaluate to true. Returns FALSE if one or more conditions evaluate to false.

Assume: A1 = 100 A2 = 50 =IF(AND(A1=100,A2=30), A1*2,A1) =IF(AND(A1=100,A2=50), A1*2,A1)

100 200

=OR(logical condition 1, …logical condition 30)

Returns TRUE if any condition is true. Returns FALSE if all conditions evaluate to false.

Assume: A1 = 1st Year A2 = 2nd Year =IF(OR(A1=”PhD”, A2=”2nd Year”) “Current”,”Alum”) =IF(OR(A1=”Class 10”, “Class 09”) “Current”, ”Alum”)

Current Alum

=NOT(logical condition)

Reverses the value of its argument.

Assume: A1 = 1st Year A2 = 2nd Year =IF(NOT(A1=”1st Year”), “Class of 10”, “Class of 09”) =IF(NOT(A1=”PhD”), “Class of 10”, “Class of 09”)

Class of 09 Class of 10

Proficiency 42


Excel’s Built-in Lists Excel maintains a set of built-in lists to make model construction easier and faster. View the lists by clicking the “Home” button and choosing the “Popular” option. Then click the button “Edit Custom Lists” to open the “Custom Lists” dialog.

Use a custom list by entering any value from the list in a worksheet cell and extending the list values to adjacent cells by using the cell fill box.

For example, enter “Mar” in Cell A1 and drag down the column to have Excel automatically enter subsequent months. Or, enter “Wednesday” in Cell B1 and drag down the column to have Excel automatically enter subsequent day names.

End of Excel Proficiency Skills Review Summary

Home

Enter list values in the “List entries” box and then use the Add button on the “Custom Lists” tab of the “Options” dialog to create your own custom lists. A custom list is saved in your copy of Excel and is available across workbooks.

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