Before You Start: How to Use Spreadsheets
Excel 2007
Throughout this book, all Test Your Skills exercises are available in Microsoft
Excel spreadsheets on your student disk. Although you will be able to calculate
your answers by hand, the authors recommend that you use the spreadsheets
for two main reasons: (1) you will be able to practice using the spreadsheets that
you may use as a manager, and (2) you will be able to “play” with the numbers
and create your own scenarios. These applications can be used with a variety of
spreadsheet software packages; the authors chose Excel because it is widely
available. It is assumed that you have basic knowledge of spreadsheets when
using these applications. The dark bold and shaded cells in all of the Test Your
Skills exercises indicate that answers are required in those cells.
This tutorial is designed to give you formulas that you will need to complete the
Test Your Skills exercises at the end of each chapter. These formulas will be
used throughout the textbook. The authors have intentionally chosen the simplest
formulas that have the widest use. More experienced spreadsheet users may
want to use more advanced functions.
When you are using the Excel spreadsheets to complete the Test Your Skills
exercises, you may sometimes need to ender the raw data presented in the
textbook. To complete the exercises, you will have to enter formulas in the
spreadsheets to perform mathematical calculations just as you would when
analyzing data as a manager.
Basics of Using Spreadsheets
Assume you are the manager of a fine dining restaurant, and you want to see
how many guests your waitstaff, Anne, Debra, and George, served on Monday
and Tuesday nights. In order to quickly add up the daily totals, you decide to set
up the spreadsheet below.
A
1
2
3
4
5
Monday
Tuesday
B
Anne
25
18
C
Debra
16
24
D
George
23
21
E
Total Guests
In order to calculate the total guests served for Monday and Tuesday, you must
do the following:
1
1.
2.
3.
4.
5.
6.
7.
8.
Place the cursor in cell E2.
Type: =SUM(
Highlight the cells that you wish to add. (B2 through D2).
Excel will automatically add the cells to your formula so that it now looks like
this: =SUM(B2:D2
Complete the formula by closing the right parenthesis: =SUM(B2:D2)
Hit “Enter.”
The number 64 should appear in cell E2.
To copy the same formula for cell E3, use the Fill Handle. Simply click on the
cell, E2, and then position your mouse directly over the bottom right-hand
corner of the cell. The cursor will change to look like a plus sign, called a Fill
Handle (see the following spreadsheet). Click on the Fill Handle and drag
down to cell, E3. This will copy the formula from E2 to E3. It will automatically
change the cells you are adding to B3:D3. The answer you should have in E3
is 63. You can use the Fill Handle to copy numbers or formulas horizontally or
vertically in as many cells as you wish.
A
1
2
3
4
5
Monday
Tuesday
B
Anne
25
18
C
Debra
16
24
2
D
George
23
21
E
Total Guests
=SUM(B2:D2)
=SUM(B3:D3)
Fill Handle
Formulas Needed for Test Your Skills Exercises
Formula
Example
Explanation
=cell
=B1
=$column$row
=$B$1
=SUM(cell:cell)
=SUM(B1:B5)
Copies a number from another cell
of the worksheet
“Anchors” a cell in a series of
formulas. When using the same cell
in a variety of formulas in a
spreadsheet, place the “$” in front of
the column reference and the row
reference to indicate that each
formula is using the same cell in the
calculation. This is especially helpful
when dragging the formula to copy it
over a series of cells.
Adds numbers in a range of cells.
=SUM(cell,cell)
=SUM(B1,B5)
Adds numbers in cells that are not
adjacent to one other.
=cell+cell
=cell-cell
=cell*cell
=cell/cell
=ROUND(cell,0)
or
=ROUND(function,0)
or
=ROUND(equation,0)
=B1+B2
=B1-B2
=B1*B2
=B1/B2
=ROUND(B1,0)
or
=ROUND(SUM(B1:B4),0)
or
=ROUND(B1*1.05,0)
=ROUNDUP(cell,0)
or
=ROUNDUP(function,0)
or
=ROUNDUP(equation,0)
=ROUNDUP(B1,0)
or
=ROUNDUP(SUM(B1:B4),0)
or
=ROUNDUP(B1*1.05,0)
Adds two numbers
Subtracts one number from another
Multiplies two numbers
Divides one number into another
Rounds numbers up or down. The
“0” denotes that the number of
decimal places will be 0. You can
use 1, 2, 3, etc. to indicate decimal
places more than 0. When the
number in one cell has been
calculated as a formula and is also
being used in a formula of a second
cell, this will guarantee that no
rounding errors will occur in the
second cell.
Rounds numbers up only. The “0”
denotes that the number of decimal
places will be 0. You can use 1, 2,
3, etc. to indicate decimal places
more than 0. (Good to use when
rounding up guest counts to whole
numbers in CVP calculations.)
In the following
formulas, the word
“cell” may be replaced
by an actual number,
e.g., =cell+25
3
Note, to change decimal numbers to percentages, do the following:
1. Highlight the cell.
2. Go to the menu at the top of the page and click on the “Home” tab.
3. You will see seven groups, which are “Clipboard,” “Font,” “Alignment,”
Number,” “Styles,” “Cells,” and “Editing.”
4. On the “Cells” group, click “Format.”
5. Under “Format,” click on “Format cells.”
6. In the “Format Cells” window, click on the “Number” tab.
7. Under “Number,” click on “Percentage.”
8. You will also find a box to the right that will allow you to choose the number of
decimal places.
9. Click on “OK” to change the number to a percentage.
4
How to Sort a Table
The following is an example of Goal Value Analysis set up in Excel. Your task is
to sort the menu items by Goal Value from highest to lowest.
Item
Overall Menu (Goal Value)
Strip Steak
Coconut Shrimp
Grilled Tuna
Chicken Breast
Lobster Stir-Fry
Scallops & Pasta
Beef Medallions
Food
Cost %
0.35
0.45
0.30
0.40
0.22
0.51
0.24
0.37
Number
Sold
100
73
121
105
140
51
85
125
Selling
Price
$16.55
17.95
16.95
17.95
13.95
21.95
14.95
15.95
Variable
Cost %
0.30
0.30
0.30
0.30
0.30
0.30
0.30
0.30
Goal
Value
376.5
180.2
574.3
339.3
731.2
104.2
444.3
414.5
1. First, calculate the Goal Value by placing the ENTIRE Goal Value formula for
the Overall Menu (Goal Value) in the Goal Value column as follows (the
words in the following formula represent cells to click on in their
corresponding columns): = (1 – Food Cost %) * Number Sold * Selling Price *
(1 – (Variable Cost % + Food Cost %)). The table will not sort correctly if
partial calculations for goal values exist in the Food Cost % or Variable Cost
% columns. Specifically, DO NOT calculate (1 – Food Cost %) in the Food
Cost % column or (1 – (Variable Cost % + Food Cost %)) in the Variable Cost
% column.
2. Drag the formula down the Goal Value column using the Fill Handle.
3. Highlight the completed table including the header row.
4. Go to the menu at the top of the screen and click on the “Home” tab.
5. In the “Editing” group, click on “Sort & Filter.”
6. Under “Sort & Filter,” click on “Custom Sort.”
7. A “Sort” window will appear on your screen. At the top right of the “Sort”
window you will see “My data has headers.” Make sure you click in the box (a
check mark will appear) to indicate that your table has a header row.
8. In the same “Sort” window, you will see three drop-down menus: “Column
Sort by,” “Sort on,” and “Order.” In the “Column Sort by” drop-down menu,
click on “Goal Value.” In the “Sort on” drop-down menu, click on “Values.” In
the “Order” drop-down menu, click on “Largest to Smallest.”
9. Click “OK” at the bottom of the window to sort the table. Your sorted table
should appear as follows.
5
Item
Chicken Breast
Coconut Shrimp
Scallops & Pasta
Beef Medallions
Overall Menu (Goal Value)
Grilled Tuna
Strip Steak
Lobster Stir-Fry
Food
Cost %
0.22
0.30
0.24
0.37
0.35
0.40
0.45
0.51
Number
Sold
140
121
85
125
100
105
73
51
Selling
Price
$13.95
16.95
14.95
15.95
16.55
17.95
17.95
21.95
Variable
Cost %
0.30
0.30
0.30
0.30
0.30
0.30
0.30
0.30
Goal
Value
731.2
574.3
444.3
414.5
376.5
339.3
180.2
104.2
How to Create a Trend Line
Your task is to create a trend line. However, before you can create a trend line,
you will need to create a baseline. The following is an example of sales data you
can enter in Excel for your baseline.
Fiscal Year
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
Sales
21.5
25.4
26.4
29.6
31.1
32.4
34.3
The following steps will help you create a baseline.
1. Highlight all the data in the table, including the headings.
2. Go to the menu at the top of the screen and click on the “Insert” tab. You will
see five groups, which are “Tables,” Illustrations,” “Charts,” “Links,” and
“Text.”
3. The “Chart” group shows you different types of charts. Click on “Line.” You
will see “2-D line” and “3-D line” sections. Click on the first box on the second
row in the “2-D line” section (Line with Markers).
4. Your baseline should appear as follows.
6
5. To move the line graph to a specific location on the spreadsheet, left click on
any white space within the chart, holding down the mouse button, and drag
the chart to the desired location.
6. To resize the chart, click on any of the 8 dots on the border of the chart. The
side middle dots make the chart larger or smaller horizontally, and the top and
bottom middle dots make the chart larger or smaller vertically. The dots in the
corners of the chart will resize the entire chart (larger or smaller), maintaining
the chart’s original proportions.
Now that your baseline is in the chart, you can create a trend line (future
prediction) using the baseline. For this example, create a trend line to predict
sales for 2009 and 2010 (2 periods in the future). Follow the steps below to
create a trend line.
1. Left click on any one of the markers (the diamonds on your baseline in your
line graph). The markers will change shape.
2. Right click on any of the markers, and then left click on “Add Trendline” in the
box.
3. A “Format Trendline” window will appear on your screen. This window is
divided into two sections: left and right columns. You will choose the
“Trendline Options” at the top of the left column.
4. On the right column, click on “Linear” in the “Trend/Regression Type” box to
create a straight trend line.
5. Type “2” in the “Forward:” box in the “Forecast” section (toward the bottom of
the window) in order to project the next two year’s sales.
6. Click on “Close” at the bottom of the window.
7. Your trend line should appear as follows.
7
8. You have now created a trend line. Sit back and admire your work!
8