CHAPTER 1: SPREADSHEET BASICS

Instructor’s Manual Problem Set

Solutions can be found in the accompanying Excel files. Note that if you wish to see all of the formulas at
once, you may use the CTRL+` (Control plus grave accent) shortcut key to toggle them on or off.

1. The following table contains closing monthly stock prices for Oracle Corporation (ORCL),
Microsoft Corporation (MSFT), and NVidia (NVDA) for the first half of 2017.
Ticker 6/30/2017 5/31/2017 4/30/2017 3/31/2017 2/28/2017 1/31/2017

ORCL 50.14 45.39 44.96 44.61 42.59 40.11

MSFT 68.93 69.84 68.46 65.86 63.98 64.65

NVDA 144.56 144.35 104.3 108.93 101.48 109.18

a) Enter the data, as shown, into a worksheet and format the table as shown.

b) Create a formula to calculate the monthly rate of return during the first semester of 2017 and for each
company. Format the results as percentages with two decimal places.

c) Calculate the total return for the entire holding period, the compound average monthly rate of return,
the average monthly rate of return using the AVERAGE function, and the average monthly rate of
return using the GEOMEAN function.

d) Create a line chart showing the stock prices from January to June 2017 for these companies. Make
sure to title the chart and label the axes. Also present the data from January to June and use Times
New Roman for the title, labels, and numbers. Select a different dash type for each line representing
each company.

2. The following table contains financial information for Intel Corp.

Intel Corporation

Income Statement ($ millions)

Dec-16 Dec-15 Dec-14 Dec-13 Dec-12

Sales 59387 55355 55870 52708 53341

Cost of Goods Sold (COGS) incl. D&A 23425 20651 20522 21418 20507

Gross Income ? ? ? ? ?

SG&A Expense 21149 19835 19693 18729 18117

EBIT (Operating Income) 14813 14869 15655 12561 14717

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 Nonoperating Income - Net 533 -51 224 595 463

Interest Expense 733 337 192 244 90

Unusual Expense - Net 1677 269 -114 301 217

Pretax Income ? ? ? ? ?

Income Taxes ? ? ? ? ?

Net Income 10316 11420 11704 9620 11005

a) Enter the data, as shown, into a worksheet and format the numbers with a comma separating the
thousands position and no decimal places.

b) Create the required formulas to calculate the missing variables, and format the results to match the
other numbers.

c) Calculate the average tax rate, the gross profit margin, and the net profit margin for 2012-2016.
Format the results as percentages with two decimal places.

d) Create a line chart showing the gross profit margin and the net profit margin for 2012-2016. Make
sure to title the chart and label the axes.

e) Create a copy of the income statement and replace each item with a formula that shows it as a
percentage of sales. You should only use one formula that can be copied and pasted to the rest of the
income statement.

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Chapter 1: Spreadsheet Basics
IM Problem Set & Solutions

3. The following table contains financial information for Intel Corp.

Intel Corporation

Balance Sheet ($ millions)

Dec-16 Dec-15 Dec-14 Dec-13 Dec-12

Assets

Cash & Short-Term Investments 17099 25313 14054 20087 18162

Short-Term Receivables 5074 5530 4427 3647 4699

Inventories 5553 5167 4273 4172 4734

Other Current Assets 7782 4346 4976 4178 3763

Total Current Assets ? ? ? ? ?

Net Fixed Assets 77819 62709 64226 60274 52993

Total Assets ? ? ? ? ?

Liabilities & Shareholders' Equity

ST Debt & Curr. Portion LT Debt 4634 2634 1604 281 312

Accounts Payable 2475 2063 2748 2969 3023

Income Tax Payable 329 272 443 542 711

Other Current Liabilities 12864 10698 11224 9776 8852

Total Current Liabilities ? ? ? ? ?

Long-Term Debt 20649 20036 12107 13165 13136

Deferred Tax Liabilities 1730 2539 3775 4397 3412

Other Liabilities 3538 2841 3278 2972 3702

Total Liabilities ? ? ? ? ?

Preferred Stock (Carrying Value) 882 897 912 0 0

Common Equity 66226 61085 55865 58256 51203

Total Shareholders' Equity 67108 61982 56777 58256 51203

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Total Liabilities & Shareholders' Equity ? ? ? ? ?

a) Enter the data into a worksheet and format the table as shown. Format the cells as accounting
numbers with no decimal places.

b) Create a formula to calculate the missing values in the table denoted by a question mark using the
SUM function, and format the results to match the other numbers.

c) Use a formula to calculate total debt as a percentage of total assets, and a similar formula showing
total shareholder’s equity as a percentage of total assets as of the end of 2016.

d) Create a pie chart showing the proportion of total debt and total equity that Intel used to finance its
assets at the end of 2016. Make sure to title the chart and add data labels.

e) Create a chart showing how debt and equity as a percentage of total assets have changed over time.
Be sure to title the chart, label the axes, and reverse the x-axis so that time flows from left to right.

f) Copy the balance sheet and express each item as a percentage of total assets.

g) Create a chart showing current assets, fixed assets, current liabilities, and long term liabilities for
2012–2016. Be sure to add a title and axis labels, and reverse the x-axis so that time flows from left to
right.
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Chapter 1: Spreadsheet Basics
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4. Using the data from the previous problem:

a) Calculate the growth rate of each balance sheet item for Intel for each year from 2012 to 2016.

b) Calculate the compound annual growth rate during 2012–2016 and the average annual growth rate
during the same period using the AVERAGE function of each item using the results you calculated
in part a.

c) Calculate the ratio of each year’s data to the previous year for each of the above items. Also, calculate
the average annual growth rate using the GEOMEAN and the standard deviation using the STDEV.S
function for each item.

Internet Exercise
5. Using MSN Money, get total revenue, net income, total assets, and total equity for Chevron
(CVX) from http://www.msn.com/en-us/money/stockdetails/financials/fi-126.1.CVX.NYS. Plot
the net profit margin, return on assets (ROA), and return on equity (ROE) for the last four
years.
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CHAPTER 1: MULTIPLE CHOICE

1. What is the result of the math operation in
cell A4?
a) -0.88

b) 7.86

c) 12.34

d) 16.43

e) 20.85

Solution: d

2. What is the result of the math operation in

cell E4?
a) 1.00

b) 0.111

c) 19.00

d) -13.00

e) -41.00

Solution: a

3. What formula in cell H7 will allow you to

calculate Total Current Assets/Total
Current Liabilities?
a) =SUM(H1:H4)/H6

b) =(H1+H2+H3+H4)/H3

c) =H1+H2+H3/H4

d) =SUM(H1:H4)/4
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Chapter 1: Spreadsheet Basics
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e) =SUM(H1:H4)/H4

Solution: a

4. What is the formula on cell B12

that will allow you to calculate the
total stock return from Jan 2017
to June 2017?
a) =B11-G11/G11

b) =B11-(G11/G11)

c) =B11/G11-G11/B11

d) =B11/G11-1

e) =(B11/G11-G11)/B11

Solution: d
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5. What is the formula in cell B16

that will allow you to calculate
the compound annual growth
rate from Jan 2017 to June
2017?
a) =(B15/G15^1/4)-1

b) =B15/G15^1/4-1

c) =(B15/G15)^(1/5)-1

d) =(B15/(G15^1/4))-1

e) =(B15/G15)^(1/4)+1

Solution: c

6. What formula in cell B21 will

allow you to calculate the
average annual stock return
using the GEOMEAN function
from Jan 2017 to June 2017?
a) =GEOMEAN(B19:F19)

b) =GEOMEAN(B20:F20)-1

c) =GEOMEAN(B20:F20)

d) =GEOMEAN(B19:F19)-1

e) =GEOMEAN(B20:F20)+1

Solution: b

7. What formula in cell B26 will

allow you to calculate the
arithmetic mean stock return from
Jan 2017 to June 2017?
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Chapter 1: Spreadsheet Basics
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a) =SUM(B25:F25)/5

b) =(B25+C25+D25+E25+F25)/5

c) =AVERAGE(B25:F25)

d) None of the above

e) a, b, and c

Solution: e

8. What solution would you get in cell B31?

a) 17.541

b) -4782.9

c) 2582.5

d) -2163.6

e) -5385.3

Solution: d
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9. What solution would you get in cell B36?

a) 3.333333

b) -1462.96

c) 123.703

d) -2453.85

e) 7606629.6

Solution: c

10. What is the result of the math operation in

cell B41?
a) 12.1560

b) 11.66667

c) 768393.53

d) 35.85792

e) 18404086.4

Solution: b

11. Tiny charts that are intended to be presented as a “word” in a line of text or next to data in
a table are called:
a) Embedded charts

b) Column charts

c) Scatter charts

d) Sparkline charts

e) Pie charts

Answer: d
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Chapter 1: Spreadsheet Basics
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12. All of the following are rules that are common to good spreadsheet design, EXCEPT:
a) Create an area specifically for the variables (inputs) in the model

b) Enter a number directly into a formula, especially when you know it will change

c) Your model should be well-organized and nicely formatted

d) If your formulas are long or use complex logic, make sure to document them

e) Always test your model thoroughly before declaring it finished.

Answer: b

13. Which of the following constitutes an absolute reference to cell B6?

a) $B6

b) B$6

c) $B$6

d) #B#6

e) B6$

Answer: c
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14. The _______ must precede all formulas in Excel, otherwise it will treat the formula as text
and will not calculate the result.
a) hash tag

b) greater than sign

c) dollar sign

d) ampersand

e) equals sign

Answer: e