Introduction to
Microsoft Excel
Business Computer Applications
What is it?: Spreadsheets Basics
• Spreadsheet is a computerized ledger
• Divided into Rows and Columns
• Excel is a “spreadsheet” which holds different kinds
of information
• It performs calculations with mathematical and
statistical functions
• It presents your information in a variety of ways, with
visually interesting charts and graphs
• Constants - entries that do not change
• Formulas - combination of constants and functions
• Spreadsheet is generic term; Worksheet is an Excel
term
• Workbook contains one or more worksheets
Why to Study it?
Why to Study it?
Absolute vs. Relative references
Copying formulas does not always work
This formula calculates first-quarter sales as a percentage of total year sales.
Not surprisingly, it divides the number in cell B4 ($1,000) by the number in cell F4 ($4,100).
However, when you pull the extension handle to copy the formula for Quarters 2,3, and 4,
you don’t get the results you want. Press the Page Down key several times to see what
happens.
#DIV/0! means Excel is trying to tell you that you have asked it to divide by 0 -- an operation
for which there is no answer. Why is this happening?
Formula references
To understand why this may be so, consider what the above formula is really saying.
To Excel, B4/F4 actually translates as “when I’m sitting in cell B5, divide the number that is
one row above me by the number that is four columns to my right and one row up.”
In other words, the formula as written tells Excel to make a calculation relative to the cursor’s
current position. Remember: the cursor always tells to Excel its current location (note B5 in
the name box above).
What you need to do for the formula to copy correctly is to tell Excel always to use the
$4,100 (i.e., the contents of cell F4) -- no matter where you copy the formula.
To do this, you need to make the reference to cell F4 an absolute reference rather than a
relative reference. Use Page Down to see how to do this.
Use the F4 key for absolute references
The screen above shows the formula corrected so that it will give the desired results after it
is copied.
To convert a relative reference to an absolute reference while building a formula, press the
F4 key immediately after clicking on the desired location with the cursor (in this case, the
immediately after selecting the cell that has $4,100 in it).
The formula changes to show a $ in front of both the column and the row for that location.
You will notice that if you continue to press the F4 key, the command toggles to set the
column, then the row, then both as absolute references.
Trivia: Excel uses the $ to indicate absolute references because in the early days of spreadsheets PC keyboards had
so few keys that software designers had to find multiple uses for each symbol. The company that first did this now
out of business, but the $ stuck.
Use the F4 key for absolute references
This screen shows the result after you copy a formula that is correctly referenced.
Use the Page Down key to walk through the steps.
When you’re done, use Page Down to see a sequence that shows setting the absolute
reference.
Setting an absolute reference
The F4 key has been pressed to right here to lock this location as an absolute reference.
This time, all the copied formulas refer correctly to the $4,100 because that location has
been set in the original formula as an absolute reference.
You can check the results by looking at the copied formulas. They all refer to $F$4.
Using Functions in Excel
• Use spreadsheets in decision making; use Goal Seek
and Scenario Manager to evaluate multiple conditions
• Use financial functions (PMT, etc.)
• Use fill handle and AutoFill capability
• Use pointing to create a formula
• Statistical Functions — MAX, MIN, AVERAGE, COUNT
• Use functions over arithmetic expressions
• Decision making functions (IF and VLOOKUP (vertical
lookup))
Excel Built-In Functions
SUM
AVERAGE
SIN
IF
AND
COUNT
COUNTIF
Many More … (look at Help and fx)
SUM(number1, number 2,…)
• Example
=SUM(3, 2) equals 5
• If cells A2:E2 contain 5, 15, 30, 40, and 50:
=SUM(A2:C2) equals 50 =SUM(B2:E2, 15) equals
150
AVERAGE(number 1, number 2,…)
• Examples
If A1:A5 is named Scores and contains the numbers
10, 7, 9, 27, and 2, then:
=AVERAGE(A1:A5) equals 11
=AVERAGE(Scores) equals 11
=SUM(A1:A5)/COUNT(A1:A5) equals 11
SIN(number)
• IMPORTANT NOTE:
– Angle (number) must be provided in radians If your
argument is in degrees, multiply it by PI()/180 to
convert it to radians.
=SIN(PI()) equals 1.22E-16, which is approx. 0
=SIN(PI()/2) equals 1
=SIN(30*PI()/180) equals 0.5, the sine of 30 degrees
COUNT
• COUNT counts the number of cells that contain
numbers & numbers within the list of arguments.
• Value 1, 2,…, are 1 to 30 arguments that can contain
or refer to a variety of different types of data, but only
numbers are counted.
• Ex., If cells A1:A17 contain some data, then
=COUNT(A1:A17) equals 17
=COUNT(A6:A17) equals 12
COUNTIF(range,criteria)
Counts the number of cells within a range that meet the
given criteria.
Suppose A3:A6 contain "apples", "oranges", "peaches",
"apples", respectively:
COUNTIF(A3:A6,"apples") equals 2
Suppose B3:B6 contain 32, 54, 75, 86, respectively:
COUNTIF(B3:B6,">55") equals 2
(A4:A130,1)
(A4:A130,2)
(A4:A130,3)
(A4:A130,4)
(A4:A130,5)
=COUNTIF(A4:A130,1)
=D4/D9*100
Some Useful Functions
• IF
• TIME
functions
Conditional Functions
• Conditional functions allow the software to perform
conditional tests and evaluate a condition in your
worksheet. Depending on whether the condition is
true or false, different values will be returned to the
cells.
• =IF is the most important conditional function
If
=IF(condition, action if true, action if false)
This tests the “condition” to determine if specific results
or cell contents are true or false.
If the result of the test is true, the “action if true” is
executed. If the result is false, the “action if false”
portion contains another set of instructions to
execute.
The instructions to be executed can return cell contents
that are labels as well as values.
Logical Operators
• To perform conditional tests, logical operators are
required.
=
<
>
<=
>=
<>
Equal
Less than
Greater than
Less than or Equal to
Greater than or Equal to
Not Equal
Logical Functions
And(logical1, logical2) Returns true if each
condition is true
Or(logical1, logical2)
Returns true if either
condition is true
Not(logical)
Returns true if the
condition is false
True()
Always returns true
False()
Always returns false
Examples
=IF(A5>20, B5, 0) means that if the value in A5 is greater than
20, use the value in B5. Otherwise assign the number 0.
=IF(AND(B11<>0,G11=1),10,0) means that if the value in B11
is not equal to 0 and the value in G11 is equal to 1, assign
the number 10. Otherwise, assign the number 0.
=IF(OR(E13=“Profit”,F15>G15),”Surplus”,”Deficit”) means
that if either E13 contains the word “Profit” or the contents
of F15 are greater than or equal to the contents of G15,
assign the label “Surplus”. Otherwise, assign the label
“Deficit”.
VLOOKUP Function
• Searches for a value in the leftmost column of a table,
and then returns a value in the same row from a
column you specify in the table. Use VLOOKUP
instead of HLOOKUP when your comparison values
are located in a column to the left of the data you want
to find.
Syntax:
=VLOOKUP(lookup_value,table_array,
col_index_num,range_lookup)
– If range_lookup is TRUE, the values in the first column of
table_array must be placed in ascending order: ..., -2, -1, 0, 1,
2, ..., A-Z, FALSE, TRUE; otherwise VLOOKUP may not give
the correct value. If range_lookup is FALSE, table_array does
not need to be sorted.
VLOOKUP Function (cont’d)
• Example:
On the preceding worksheet, where the range A4:C12 is named
Range:
–
–
–
–
VLOOKUP(1,Range,2) equals 2.17
VLOOKUP(1,Range,3,TRUE) equals 100
VLOOKUP(.746,Range,3,FALSE) equals 200
VLOOKUP(0.1,Range,2,TRUE) equals #N/A, because 0.1 is less than the
smallest value in column A
– VLOOKUP(2,Range,2,TRUE) equals 1.71
Functions within functions
• You can use functions within functions. Consider the
expression =ROUND(AVERAGE(A1:A100),1).
– This expression would first compute the average of all the
values from cell A1 through A100 and then round that result
to 1 digit to the right of the decimal point
Open the Insert Function dialog box
• To get help from Excel to insert a function, first click
the cell in which you wish to insert the function.
• Click the Insert Function button. This action will open
the Insert Function dialog box.
• If you do not see the Insert Function button, you may
need to select the appropriate toolbar or add the
button to an existing toolbar.
Examine the Insert Function
dialog box
This dialog box appears when you click the Insert Function
button. It can assist you in defining your function.
Circular reference
Situation when some parameter in the formula refers to
the formula itself
For example, in cell C5 the following formula is entered:
VLOOKUP(C5, F2:G15, 2, TRUE)
The address C5 refers to the formula itself.
In this case it is a wrong way of writing the formula.
In some cases circular references may be used
for creating recursive (recurrent) functions.
Financial Function descriptions
This chart shows some commonly used financial functions
and a description of what they do.
Excel's financial functions
• Financial functions are very useful to calculate information about
loans.
• Common functions are FV, IPMT, PMT, PPMT and PV.
• All these financial functions will use similar arguments that differ
based upon which function you are using.
– Think of the arguments as members of an equation
– The arguments represent the values of the equation that are known
and the function provides the solution for a single variable, or
unknown, value
Use the financial functions
• The FV function calculates the future value of an investment
based on periodic, constant payments and a constant interest
rate per period.
• The IPMT function provides the interest payment portion of the
overall periodic loan payment.
• The PMT function calculates the entire periodic payment of the
loan.
• The PPMT function calculates just the principal payment portion
of the overall periodic payment.
• The PV function calculates the present value of an investment.
Use the financial functions (cont’d)
• NPER Determines the number of payments needed for an
investment to grow or pay back a loan
• RATE Determines the effective interest rate
Use the Insert Function dialog box to enter
function arguments
This figure depicts how you would enter argument values for
the PMT function using the Insert Function dialog box.
Annuity - Dictionary Definition
• An annual allowance or income; also, the right to
receive such an allowance or the duty of paying it.
(First definition in Britannica World Language edition of Funk & Wagnalls
Standard Dictionary, 1966)
• We allow the payments to be more frequent than yearly
Loans and annuities
• A typical loan is an annuity: Why? The borrower
promises to pay a fixed amount every period.
• When we retire we want to set up a pension. We give
a bank some money. In return the bank promises to
pay us a fixed payment every month for a given
number of years. We can treat this as a loan:
– We loaned the bank the money.
– The bank promises to pay us back with a regular payment.
Simple and Compound Interest
• Simple interest: Interest is not paid on interest
• Compound interest: Interest is paid on interest
• Compounding per year: Number of times interest is
paid or charged each year
Example of savings account
Initial amt
Year
0
1
2
3
4
5
6
7
8
$2,000
Rate 10%
Years
8
Simple interest
Compound interest
Interest Balance
Interest Balance
$2,000
$2,000
$200
$2,200
$200
$2,200
$200
$2,400
$220
$2,420
$200
$2,600
$242
$2,662
$200
$2,800
$266
$2,928
$200
$3,000
$293
$3,221
$200
$3,200
$322
$3,543
$200
$3,400
$354
$3,897
$200
$3,600
$390
$4,287
Example of loan
You borrow $2000 at 12% annual interest compounded monthly.
What is your payment if you pay off the loan in 6 months?
Interest rate (APR)
Years
Principal
Payments
12% per year
0.5
$2,000.00
$345.10
Example: Repayment Schedule
Month
0
1
2
3
4
5
6
The repayment schedule
Old balance Interest Payment New Balance
$2,000.00
$2,000.00 $20.00 $345.10
$1,674.90
$1,674.90 $16.75 $345.10
$1,346.56
$1,346.56 $13.47 $345.10
$1,014.92
$1,014.92 $10.15 $345.10
$679.98
$679.98
$6.80 $345.10
$341.68
$341.68
$3.42 $345.10
$0.00
Standard arguments
• rate: Interest rate (in decimal) per period
• nper: Number of periods
• pmt: Regular payment
More standard arguments
• pv:
Present value: The amount the
series of future payments is worth
now. The beginning value.
• fv:
Future value: The amount the
series of future payments will be
worth in the future. The final value.
• type 0 = payment at end of period (default)
1 = payment at beginning
PMT( ) Payments
• Returns the periodic payment for an annuity or loan
• PMT(rate, nper, pv, fv, type)
• The first 3 (red) arguments are required
• Example : 12% interest compounded monthly, 3 years,
borrow $6021.50
• Monthly payment
= -PMT(.12/12, 3*12, 6021.50) =200.00
PMT( ) Example
• Ms JustRetired has $200,000 to invest at 10% annual
interest. Her goal is to have $100,000 left after 5
years. If she makes equal withdrawals each year for 5
years, how much can she withdraw each year?
•
PMT(rate, nper, pv, fv, type)
= PMT(0.10, 5, -200000, +100000)
= $36,380
PV( ) Present Value
• Returns the present value of an investment. The
present value is the total amount that a series of
future payments is worth now. That is, it is the
beginning value of the investment or loan.
• PV(rate, nper, pmt, fv, type)
PV( ) Example
• A person promises to pay you $200 per month for 3
years. If you assume 12% interest compounded
monthly, what is this annuity worth today?
• How much can you borrow at 12% annual interest
compounded monthly and repay in 3 years paying
$200 per month?
• = -PV(0.12/12, 3*12, 200) = 6021.50
FV( ) Future Value
• Returns the future (final) value of an investment. The
future value is the total amount including interest that
series of payments will be worth.
• How much money will there be in your account if you
make regular payments for a period of time?
•
FV(rate, nper, pmt, pv, type)
FV( ) Examples
• You will make $200 a month payments into a 12%
annual interest payable monthly account. How much
will you have after 3 years?
• = -FV(0.12/12, 3*12, 200) = 8615.38
• You will put $1000 in your account that pays 5%
annually compounded monthly. You will add $100 to
the account every month. How much will you have
after 10 years?
• = -FV(0.05/12, 10*12, 100, 1000) = 17175.24
NPER( ) Number payments needed for an investment
• Returns the number of periods for an investment
based on periodic, constant payments and a constant
interest rate
• NPER(rate, pmt, pv, fv, type)
Example:
• Each month you put $200 into bank account.
Assuming a 12% annual interest rate payable monthly,
how many years will you need to save before you
have $8615.38 in the account?
• = NPER( 0.01, 200, 0, -8615.38)/12 = 3
RATE( ) Effective interest rate
• Returns the interest rate per period of an annuity
• Gives the effective interest rate given the number of
periods, the periodic payment, final value and initial
value
• RATE(nper, pmt, pv, fv, type)
Example:
• You bought $1,000 of shares in a mutual fund initially and then
$100 more each month. After 10 years, your shares are worth
$17,175.24. What was the effective interest rate? (Assume the
interest is compounded monthly and paid at the end of the
month.)
• =RATE(12*10, 100, 1000, -17175.24, 0)*12
The Mortgage Worksheet
Date Functions
=Date coverts a date into a date number. Excel can
represent any given date as a serial number equal to the
number of days from Dec. 31, 1899 to the date in question.
=DATE(year number, month number, day number)
Enter the date into a cell (F5) with the =Date function. Then
enter the Report date with the =Date function into another
cell (L6). The difference between these dates (in number
of days) can be calculated with the formula =L6-F5.
Commonly used date functions
Since dates are stored as integers, you can subtract one date from another to see
how many days there are separating the two dates. The figure below provides
additional details about the common date functions in Excel.
The TODAY and NOW functions
• The TODAY and NOW functions always display the
current date and time.
• You will not normally see the time portion unless you
have formatted the cell to display it.
• If you use the TODAY or NOW function in a cell, the
date in the cell is updated to reflect the current date
and time of your computer each time you open the
workbook.
Custom functions
• Some functions can be implemented in Visual Basic.
Gaining Proficiency: Formatting
© Oleg Vlasov, KIMEP, Fall 2002
Excel Worksheet
Modifying the Worksheet
• Insert command
Modifying the Worksheet
• Delete command
Modifying the Worksheet
• Page Setup command and dialog box
Excel Formatting
•
•
•
•
•
•
Column widths
Row Heights
Numeric Format
Alignment
Fonts
Borders, Patterns, and Shading
Types of Numeric Formats
 General
 Number
 Currency
 Accounting
 Date
 Time
 Percentage
 Fraction
 Scientific
 Text
 Special
 Custom
Comments
• Right click on the cell & select Insert comment.
• You may edit or delete the comment by right clicking
on the cell & selecting your choice.
Y
Y
Y
N
790,343
1,934,349
2,103,049
1,785,323
695,034
1,793,090
Tanya Goette:
2,001,304
This store looks
1,593,032
really great!
263,448
483,587
420,610
357,065
Format Cells Command