MS Excel

MS Excel
Let’s Advance to the Next Level

Second Edition

Anurag Singal
MS Excel, Second Edition: Let’s Advance to the Next Level
Copyright © Business Expert Press, LLC, 2019.

All rights reserved. No part of this publication may be reproduced, stored

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First published in 2019 by

Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com

ISBN-13: 978-1-94944-382-0 (paperback)

ISBN-13: 978-1-94944-383-7 (e-book)

Business Expert Press Quantitative Approaches to Decision Making

Collection

Collection ISSN: 2153-9515 (print)

Collection ISSN: 2163-9582 (electronic)

Cover and interior design by S4Carlisle Publishing Services Private Ltd.,

Chennai, India

First edition: 2017

Second edition: 2019

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

 Abstract
MS Excel is one of the most powerful tools available to a business man-
ager. In this book, I have made an attempt to move to the advanced level
of skill sets and bring actionable insights to the user.
Hence, the material in this version has been organized as follows:

A) Financial functions
B) Conditional math and statistical functions
C) Data analysis
D) Decision making
E) Data cleaning and use of macros
F) Auditors

The objective is to give you a flavor of how the vast array of functions
can be used to make life easier and more efficient. You can achieve some
amazing results by mastering Excel at a basic level.
Do not just read this book as if you are reading a novel. Execute
the given functions on a workbook simultaneously and experience the
journey. It is those who practice it who will find the learning curve the
steepest.

Keywords
MS Excel; MS Excel Advanced tutorial; MS Excel Advanced courses;
­Advanced MS Excel for Accountants; Advanced MS Excel for Finance
Managers; Microsoft Excel Books; Advanced Excel Books; Microsoft
Excel Bible: The Comprehensive Tutorial Resource; Microsoft Excel -
Data Analysis and Business Modeling; Advance Excel in Depth
 Contents
Preface...................................................................................................ix
Acknowledgments....................................................................................xi
Chapter 1 Excel for Personal Financial Decisions�������������������������������1
Chapter 2 Excel for Conditional Math and Statistical Functions��������9
Chapter 3 Excel for Data Analysis����������������������������������������������������25
Chapter 4 Excel for Decision Making����������������������������������������������49
Chapter 5 Excel for Data Dashboards and Visualization������������������65
Chapter 6 Excel for Data Cleaning and Use of Macros��������������������75
Chapter 7 Excel for Auditors�����������������������������������������������������������85
About the Author...................................................................................95
Index....................................................................................................97
 Preface
The operational efficiency of any knowledge professional can improve
­significantly with an upgradation of his or her skills of MS Excel. With
every additional function that you learn, life can become a lot easier.
While in the first edition we had focused on the very basics, a com-
mon feedback was that readers wanted a more actionable book.
Hence, the material in this version has been organized as follows:

A) Financial functions
B) Conditional math and statistical functions
C) Data analysis
D) Decision making
E) Data cleaning and use of macros
F) Auditors

I hope this will significantly enhance the utility of the book.

Don’t just read this book like a novel. Practice it and the learning
curve will be the steepest.
“The proof of the pudding lies in the eating.” So let the pages make
their sales pitch themselves.
 Acknowledgments
The first edition of this book was received with great interest by readers.
It focused on providing users with a first-hand experience of the nuances
of MS Excel. A lot of them have generously taken time out to provide
feedback.
I wish to express my special thanks to the reviewer, Sonia Singal, my
better half.
I also greatly appreciate the strategic comments and advice of Ayush
Agarwal, who diligently and generously provided extensive comments as
well as encouragement.
Scott Isenberg, Managing Executive Editor, and Charlene K ­ ronstedt,
Director of Production, Business Expert Press, have been a pillar of
support.
Rene Caroline provided excellent copyediting and book production.
 CHAPTER 1

Excel for Personal Financial

Decisions

PV and FV
Excel has several financial functions:

A) The PV (Present Value) function calculates the total present (current)

value of an investment with a fixed rate, specified number of payment
periods, and a series of identical payments that will be made in the future.
B) The FV (Future Values) function calculates the future value of an invest-
ment, given a fixed interest rate, term, and identical periodic payments.
C) The NPV (Net Present Value) function calculates the net present
value of an investment, given a fixed rate (rate of return) and future
payments that may be identical or different.
2 MS EXCEL: LET’S ADVANCE TO THE NEXT LEVEL

Internal Rate of Return (IRR)

This returns the internal rate of return for a series of cash flows repre-
sented 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. The internal rate of return
is the interest rate received for an investment consisting of payments (neg-
ative values) and income (positive values) that occur at regular periods.
 Excel for Personal Financial Decisions 3

Determine # Periods in Bond Problem

4 MS EXCEL: LET’S ADVANCE TO THE NEXT LEVEL

Yield to Maturity

NPER and RATE

The NPER (Number of PERiods) function calculates the number of pay-
ment periods for an investment or loan given a fixed interest rate, periodic
payment, and present value.
The RATE function calculates the periodic rate for an investment or
loan given the number of payment periods, a fixed periodic payment, and
present value.
 Excel for Personal Financial Decisions 5

This slide shows specific examples of how the number of periods

(NPER) and rate (RATE functions) have been applied in a worksheet.

Create a Loan Amortization Table

Suppose you want to create a payment schedule that shows the interest
per payment period, principal repayment for each payment, and the bal-
ance after each payment is made. This is called a loan amortization table,
and a partial table is shown in the slide. Because this example is for a car
loan over 4 years or 48 monthly payments, the complete schedule cannot
be viewed in its entirety.
Let’s look at the financial functions that are needed to generate this
amortization table.
6 MS EXCEL: LET’S ADVANCE TO THE NEXT LEVEL

IPMT
The IPMT function calculates the periodic interest for a specified pay-
ment period on a loan or an investment given a fixed interest rate, speci-
fied term, and identical periodic payments.
=IPMT(rate,per,nper,pv,[fv],[type])
The PPMT function calculates the principal payment for a specified
payment period on a loan or an investment given a fixed interest rate,
specified term, and identical periodic payments.
=IPMT(rate,per,nper,pv,[fv],[type])
The arguments for these two functions are:

A) The rate argument is the periodic interest rate. If the APR is 6 percent
and the payments are made monthly, then the rate is 6 percent/12 or
0.5 percent.
B) The per argument is the specific payment or investment period to use
to calculate the interest where the first payment period is 1.
C) The nper argument represents the total number of payment or invest-
ment periods. With a 4-year loan consisting of monthly payments,
the number of payment periods is 48.
D) The pv argument represents the present value of the loan or investment.
E) The optional fv argument represents the future value of the loan or
investment. If you omit this argument, Excel defaults to 0.
F) The optional type argument represents the timing of the payments.
Enter 0 if the payments are made at the end of the period, or enter 1
if the payments are made at the beginning.

Cumulative Calculation Functions

• The CUMIPMT function calculates the cumulative interest
through a specified payment period.
=CUMIPMT(rate,nper,pv,start_period,end_period,type)
• The CUMPRINC function calculates the cumulative principal
through a specified payment period.
=CUMPRINC(rate,nper,pv,start_period,end_period,type)
 Excel for Personal Financial Decisions 7

The only two new arguments are the start_period argument, which
specifies the first period you want to start accumulating the interest, and
the end_period argument, which specifies the last payment period you
want to include.
The amortization table is shown once again so you can see how the
various functions were applied.
 Index
Add-ins, 57 correlation, 12–13
Aging of receivables, 90–93 COUNTIFS, 10–11
Analysis ToolPak add-in, 14 covariance, 18
ANOVA, 16–17 Descriptive Statistics, 15–16
covariance, 18 frequency distribution, 13
Descriptive Statistics, 15–16 histogram, 19
histogram, 19 measuring central tendencies, 11
ANOVA, 16–17 standard deviation functions, 12
ANOVA: Single Factor, 14, 17 SUMIFS, 10–11
Audit data lying at extremes variance functions, 12
(outliers), 89 CONFIDENCE.T function, 10
Auditors Convert Text to Columns wizard,
aging of receivables, 90–93 77–79
Benford’s Law, 85 CORREL (correlation coefficient)
data lying at extremes (outliers), 89 function, 13
illustration, 87–88 Correlation, 12–13, 14
random sampling, 86 COUNT function, 10
sampling, 86 COUNTA function, 10
scatter plots, 89–90 COUNTIF function, 10, 11
stratifying data in PivotTable, 87 COUNTIF () function, 63–64
Univariate Statistics, 85–86 COUNTIFS function, 10–11
AVERAGE function, 9 Covariance, 18
AVERAGEIF function, 11 COVARIANCE.P function, 18
AVERAGEIFS function, 10–11 COVARIANCE.S function, 18
CUMIPMT function, 6–7
Bar graph, 68–69 CUMPRINC function, 6–7
Basic pivot table, 36–39
Benford’s Law, 85 Dashboard
Bins_array argument, 13 bar graph, 68–69
Box and Whisker, 72 defined, 65
design, 66–73
Changing cell, 57, 58 Fill Color, 73
CHISQ.DIST.RT function, 9 Font Color, 73
CHISQ.TEST function, 9 line graph, 69
CLEAN function, 75 modern chart types, 71–72
Column Number, 25, 28 pie chart, 70
Conditional math and statistical planning stage, 65–66
functions, 9–23 tables, 71
Analysis ToolPak add-in, 14–19 Data analysis
ANOVA, 16–17 GETPIVOTDATA function, 48
AVERAGEIFS, 10–11 HLOOKUP function, 25–29
case exercise, 23 INDEX function, 29
case study, 19–22 with MATCH function, 31
98 INDEX

MATCH function, 29–30 GETPIVOTDATA function, 48

with INDEX function, 31 Goal Seek Tool, 49–50
PivotChart, 47–48
PivotTable, 32–46 Histogram, 14, 19, 72
VLOOKUP function, 25–29 HLOOKUP (horizontal lookup)
VLOOKUP with INDEX function, function, 25–29
31–32
Data Analysis menu dialog box, 15 INDEX function, 29
Data importing, 75–79 with MATCH function, 31
Data Tables, 50 with VLOOKUP function,
one-way, 50–52 31–32
two-way, 53–54 Internal rate of return (IRR)
data_array argument, 13 function, 2–4
Decision making IPMT function, 6
goal seek command, 49–50
one-way Data Table, 51–52 Keep It Simple Stupid (KISS)
sensitivity analysis approach, 67
with Data Tables, 50–54 KURT function, 10
Scenario Manager for, 54–55
two-way Data Table, 53–54 LEFT function, 79
Descriptive Statistics dialog box, 16 LEN function, 80
Descriptive Statistics function, 14 Line graph, 69
illustration, 15–18 Loan amortization table, 5

End_period argument, 7 Macro

Error, 25, 28 button creation, 83–84
Excel defined, 80
for auditors, 85–93 recording, 81–82
conditional math and statistical running, 82
functions, 9–23 Macro Recorder, 80
data analysis, 25–48 MATCH function, 29–30
data cleaning, 75–80 with INDEX function, 31
data dashboards and visualization, MAX function, 10
65–73 Measuring central tendencies,
decision making, 49–64 functions for, 11
importing data into, 75–79 MEDIAN function, 10
macros, 80–84 MID function, 80
personal financial decisions, 1–7 MIN function, 10
Extracting data values, using text Minitab, 9
functions, 79–80 Modern chart types, 71–72
MODE.SNGL function, 10
Factory production, case study, 19–22 Monte Carlo simulation, 61–64
Fill Color, 73
Filter, PivotTable, 43–46 NESTED IF, 87
Font Color, 73 Net Present Value (NPV)
Formula Bar, 13 function, 1
Frequency distribution, 13 Nonstatistical sampling, 86
FREQUENCY function, 13, 19 Number of PERiods (NPER)
Future Values (FV) function, 1 function, 3–5
 INDEX
99

Objective cell, 57, 58 with Data Tables, 50–54

One-variable data table, 51–52 Scenario Manager for, 54–55
One-way Data Tables, 50–52 Single-factor ANOVA report, 17
SKEW function, 10
Pareto, 72 Slice, PivotTable, 43–46
PARETO ANALYSIS, 87 Solver tool, 56–57
PEARSON function, 10 determining optimal product mix,
Personal financial decisions, 1–7 58–60
cumulative calculation functions, 6–7 Specific accounts payable tests, 87
Future Values function, 1 SPSS, 9
internal rate of return function, 2–4 Standard deviation function, 11–12
IPMT function, 6 start_period argument, 7
loan amortization table, 5 Statistical sampling, 86
Net Present Value function, 1 STDEV.P function, 10, 12
NPER function, 4–5 STDEV.S function, 10, 12
PPMT function, 6 Substitution value, 51
Present Value function, 1 SUMIF function, 11
RATE function, 4–5 SUMIFS function, 10–11
Pie chart, 70 Sunburst, 72
PivotChart, 47–48
PivotTable, 32–46 T-Test: Paired Two-Sample Assuming
basic, 36–39 Unequal Variances, 14
creation, 33–35 t-Test: Paired Two-Sample for Means,
design, 46 14
features, 32 t-Test: Two-Sample Assuming Equal
filter, 43–46 Variances, 14
illustration, 35 Tables, 71
modify, 39–42 Target cell, 57
slice, 43–46 TEXT function, 76
stratifying data in, 87 Text functions, to extract data, 79–80
PivotTable Field List, 33–34 Treemap, 72
PMT function, 50 TRIM function, 75
PPMT function, 6 TRIM (PROPER ()) function, 76
Present Value (PV) function, 1 Two-variable data table, 53–54
PROPER function, 75 Two-way Data Tables, 50, 53–54

R, 9 Univariate Statistics, 85–86

RAND (), 61, 86
Random sampling, 86 VALUE function, 75
Range, 25, 28 VALUE (TRIM (CLEAN ())), 76
RATE function, 4–5 Variance function, 11–12
RIGHT function, 79 VAR.P function, 10, 12
VAR.S function, 10, 12
Sampling, 86 Visual Basic for Applications
SAS, 9 (VBA), 80
Scatter plots, 89–90 VLOOKUP (vertical lookup)
Scenario Manager, for sensitivity function, 25–29
analysis, 54–55 with INDEX function, 31–32
Search Value, 25, 28
Sensitivity analysis Waterfall, 72
 OTHER TITLES IN QUANTITATIVE APPROACHES
TO DECISION MAKING COLLECTION
Donald N. Stengel, California State University, Fresno, Editor
• Regression Analysis: Understanding and Building Business and Economic Models Using
Excel, Second Edition by J. Holton Wilson, Barry P. Keating, and Mary Beal-Hodges
• Operations Methods: Managing Waiting Line Applications, Second Edition
by Kenneth A. Shaw
• Using Statistics for Better Business Decisions by Justin Bateh and Bert G. Wachsmuth
• Applied Regression and Modeling: A Computer Integrated Approach by Amar Sahay
• The Art of Computer Modeling for Business Analytics: Paradigms and Case Studies
by Gerald Feigin
• Data Visualization, Volume I: Recent Trends and Applications Using Conventional
and Big Data by Amar Sahay
• Data Visualization, Volume II: Uncovering the Hidden Pattern in Data Using Basic
and New Quality Tools by Amar Sahay
• Decision Analysis for Managers, Second Edition: A Guide for Making Better Personal
and Business Decisions by David Charlesworth
• Conducting Survey Research: A Practical Guide by John Fogli and Linda Herkenhoff

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