Chapter 2
Let the students know that at least 75% of all my
work as an analyst is done in Excel. I can be a
real-life example for students. – Thomas Wang,
quant student
Introduction to Spreadsheets
with Excel
1
Initial Excel Spreadsheet
2
The Fill Handle
and the Formula Bar
Formula Bar
3
The Fill Handle
is used for
highlighting,
copying and
deleting.
Fill Handle
The Formula Bar
shows what is
entered in a cell
Spreadsheet Arithmetic
• Addition: =A1+A2
=SUM(A1:A2)
• Subtraction: =A1-A2
• Multiplication: =A1*A2
• Division: =A1/A2
• Exponents: =A1^A2
4
Relative Versus Absoloute
References
A
1
2
3
4
5
The relative references
A1:A2 in cell A3 refer to
the 2 cells above cell
A3.
The absolute
references
$A$1;$A$2 in cell
A3 always refer to
cell $A$1:$A$2.
5
B
3
5
8
3
When copied to cell C3,
the relative references
refer to the 2 cells above
cell C3.
0
A
B
C
=SUM(A1:A2)
=SUM(C1:C2)
A
1
2
3
4
5
C
B
3
5
8
C
When copied to cell C3, the
absolute references refer to
$A$1:$A$2
8
A
B
C
3 =SUM($A$1:$A$2)
=SUM($A$1:$A$2)
Tool Bar Icons for Font , Size,
Bold, Italics, and Underline
Clicking on one of the icons gives the
characteristic to a cell or group of cells.
Font
size
6
Underline
Bold
Font
Italics
The Format Cells, Drop Down Menu,
and the Font Tab of the Formal Cells
Dialog Box
Click on Format and
Cells to get the
Format Cells dialog
box. Then select the
Font tab.
The Font tab of
the Format Cells
dialog box is
another way to
change the
format of a cell
or a group of
cells.
7
Tool Bar Icons
for Formatting Numbers
Clicking on one of the icons gives the
characteristic to the numbers in a cell or
group of cells:
Changes
numbers to
dollars
8
Changes
numbers
to percent
Inserts
comma
separators
in numbers
Increases
the number
of decimal
showing
Decreases
the number
of decimal
showing
The Number Tab of the
Format CellsDialog Box
Click on Format and
then Cells to get the
Format Cells dialog
box. Then select the
Number tab.
The Number tab
of the Format
Cells dialog box
is another way
to change the
format of a
number in a cell
or a group of
cells.
9
Tool Bar Icons
for Aligning Cell Contents
Clicking on one of the first 3 icons will left,
center, or right adjust a cell’s contents.
10
Highlighting several cells and
clicking on the last icon will merge
the cells and center a cell’s
contents.
Special Symbols
• Greek Letters
Use Symbol font: l becomes l
• Equal to or less (greater) than signs
Use inequality key and then underline
• Equal to signs as text
Type apostrophe and then =
11
Displaying Subscripts with the
Format Cells Dialog Box
Click on Format
and then Cells to
get the Format
Cells dialog box.
Then select the
Font tab and
click on the
Subscript box.
12
Displaying Gridline and Row and Column
Headings with the Page Setup Dialog Box
Click on File and the Page Setup to get the
Page Setup dialog box. Then select the
Gridlines and Row and column headings boxes.
13
Swatville Sluggers Example
– Question: Will Swatville Sluggers make any
money fulfilling making eighty 30-inch bats?
•
•
•
•
•
•
14
Data:
Sale price, p = $22 per bat
Fixed cost, k = $1,000
Variable cost, c = $4.95 per bat
Number sold = S
Cost = k + cS
Revenue = pS
The Breakeven Quantity
Cost = Revenue
k + cS = pS
Solving for S gives the
Breakeven Quantity
S = k/(p – c)
15
Breakeven Chart
Breakeven Chart
$5,000
Dollars
$4,000
$3,000
Cost
Revenue
$2,000
$1,000
$-
0
20 40 60 80 100 120 140 160 180 200
Number of Bats
16
Breakeven Analysis
Swatville Sluggers
1. Enter data in
cells D6:D8 and
A13:A25.
A
B
C
D
E
F
1
BREAKEVEN ANALYSIS
2
3 PROBLEM: Swatville Sluggers
4
5 Parameter Values:
6
Unit sales price: p =
$
22
7
Fixed cost: k =
$
1,000
8
Unit cost: c =
$
9.95
9
D
10
=D7/(D6-D8)
10
Breakeven quantity: S
83
11
12
Quantity
Cost
Revenue
Profit
B
13
0 $ 1,000.00 $
$(1,000.00) 12
Cost
14
20 $ 1,199.00 $ 440.00 $ (759.00) 13 =$D$7+$D$8*A13
15
40 $ 1,398.00 $ 880.00 $ (518.00) 14 =$D$7+$D$8*A14
16
60 $ 1,597.00 $ 1,320.00 $ (277.00) 15 =$D$7+$D$8*A15
16 =$D$7+$D$8*A16
17
80 $ 1,796.00 $ 1,760.00 $ (36.00) 17 =$D$7+$D$8*A17
18
82 $ 1,815.90 $ 1,804.00 $ (11.90) 18 =$D$7+$D$8*A18
19
83 $ 1,825.85 $ 1,826.00 $
0.15 19 =$D$7+$D$8*A19
20
100 $ 1,995.00 $ 2,200.00 $ 205.00 20 =$D$7+$D$8*A20
21
120 $ 2,194.00 $ 2,640.00 $ 446.00 21 =$D$7+$D$8*A21
22 =$D$7+$D$8*A22
22
140 $ 2,393.00 $ 3,080.00 $ 687.00
23 =$D$7+$D$8*A23
23
160 $ 2,592.00 $ 3,520.00 $ 928.00 24 =$D$7+$D$8*A24
180 $ 2,791.00 $ 3,960.00 $ 1,169.00 25 =$D$7+$D$8*A25
17 24
25
200 $ 2,990.00 $ 4,400.00 $ 1,410.00
G
H
2. If more rows
are needed insert
the appropriate
number at any
intermediate row.
It is easiest not to
add the new rows
at the end of the
table.
C
Revenue
=A13*$D$6
=A14*$D$6
=A15*$D$6
=A16*$D$6
=A17*$D$6
=A18*$D$6
=A19*$D$6
=A20*$D$6
=A21*$D$6
=A22*$D$6
=A23*$D$6
=A24*$D$6
=A25*$D$6
D
Profit
=C13-B13
=C14-B14
=C15-B15
=C16-B16
=C17-B17
=C18-B18
=C19-B19
=C20-B20
=C21-B21
=C22-B22
=C23-B23
=C24-B24
=C25-B25
Charts
Charts are easy to do using
Excel’s Chart Wizard. Highlight
your data and click on the chart
icon.
Step 1 - Chart Type
Step 2 - Chart Source Data
Step 3 - Chart Options
Step 4 - Chart Location
18
Chart Wizard
Step 1 - Chart Type
Step 1 - Chart
Type is where
you select the
type of chart:
bar, pie, scatter,
etc.
19
Chart Wizard Step 2 - Chart
Source Data, Range Tab
Step 2 - Chart Source
Data, Data Range tab,
is where you verify
the range of the data
you selected and
indicate whether the
data is in columns or
rows.
20
Chart Wizard Step 2 - Chart
Source Data, Series Tab
Step 2 Chart Data
Source, Series tab
can be used to
make changes to
the x-axis if it is not
correct
21
Chart Wizard
Step 3 - Chart Options
Step 3 Chart Options is used to
enter the chart and axes titles.
The tab give other options that
can be adjusted.
22
Chart Wizard
Step 4 - Chart Location
Step 4 - Chart Location lets you pick
where the chart will be displayed.
23
The Initial Breakeven Chart
$5,000.00
$4,000.00
$3,000.00
$2,000.00
$1,000.00
$-
Cost
0
20
0
16
0
12
80
40
Revenue
0
Dollars
Breakeven Chart
Number of Bats
24
Changing Chart Formats: Highlight the
characteristic, right click, then select the option
desired from the dropdown menu.
1. Highlight the
Number of Bats
on the x-axis.
2. Select Format
Axis Title on the
drop down
menu.
3. Make any
changes on the
Font tab of the
Format Axis Title
dialog box.
25
Changing the X-Axis Font
Using Excel with this Text
The Guide to Excel on the CD-ROM
accompanying this contains more
information about Excel:
•
•
•
•
•
26
Formatting
Displaying results
Printing
Special Excel Functions
Excel Add-Ins (Solver & Analysis ToolPak)