Using Referencing, Functions and Formulas

Prof. Himanshu Joshi International Management Institute [email protected]

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Use absolute references

An absolute reference is a cell reference that does not change when you copy the formula to a new location. To create an absolute reference, you preface the column and row designations with a dollar sign ($). For example, the absolute reference for B5 would be $B$5. This cell reference would stay the same no matter where you copied the formula.
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Use relative references

A relative reference is a cell reference that shifts when you copy it to a new location on a worksheet. A relative reference changes in relation to the change of location. If you copy a formula to a cell three rows down and five columns to the right, a relative reference to cell B5 in the source cell would become G8 in the destination cell.

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Use mixed references

A mixed reference combines both relative and absolute cell references. You can effectively lock either the row or the column in a mixed reference. For example, in the case of $B5, the row reference would shift, but the column reference would not In the case of B$5, the column reference would shift, but the row reference would not You can switch between absolute, relative and mixed references in the formula easily in the edit mode or on the formula bar by selecting the cell reference in your formula and then pressing the F4 key repeatedly to toggle through the reference options.
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Referencing: Relative, Absolute & Mixed Mode

Serial No 1 2 3 4 5 6 7 8 A1 A1:B3 5:5 B:B 5:7 B:E $A$1 $A1 Method What is referenced? Single cell Range Range Range Range Range Cell Cell Type Usage Relative A is column identifier, 1 is row identifier Relative This references 6 cells Relative All cells in row 5 Relative All cells in column B Relative All cells in rows from 5 to 7 Relative All cells in columns from B to E Absolute The cell A1. Cut-pasting formula to another location will not change the reference. Mixed The $ makes the column reference absolute, leaving the row reference relative

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Working with Formulas and Functions

A formula is entered into a cell, performs a calculation and returns a result. A formula can consist of

Mathematical operators Cell references (including named cells and ranges) Values or text Worksheet functions (SUM, AVERAGE) Can be entered manually (typing inside the formula bar) Or by pointing to cell references.
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A formula must begin with an equal sign

Working with Formulas and Functions

A formula is comprised of operands and operators. An operand is an element that you want included in the calculation May either be

a constant value (i.e., any number, date, or text entry) a range name a cell address

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Working with Formulas and Functions

An operator is the symbol used to determine what type of calculation to perform on the operand(s) Excel provides four categories of calculation operators

arithmetic (+, -, *, /, %, and ^) comparison (=, >, <, >=, <=, <>) text (&) reference (for example, the colon [:], comma [,], and space [ ] characters).
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Using formulas & functions

A basic formula example to add up a small number of cells is =A1+A2+A3+A4, but that method would be cumbersome if there were 100 cells to add up. You can easily calculate the sum of a large number of cells by using a function SUM(A1:A100). A function is a predefined, or built-in, formula for a commonly used calculation. You can also use functions within functions. Consider the expression =ROUND(AVERAGE(A1:A100),1). Each function has a syntax which specifies the order in which you must enter the different parts of the function. Arguments are numbers, text, or cell references used by the function to calculate a value. Some arguments are optional

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Function Categories
Category Financial Description Determine loan payments, present and future values, depreciation schedules, and rates of return

Date & Time Perform date and time calculations; input the current date and/or time into a cell
Math & Trig Sum a range of values; perform trigonometric calculations; determine absolute and rounded values Statistical Determine the average, median, minimum, and maximum values for a range; calculate statistical measures, like variance and standard deviation
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Function Categories
Lookup & Reference Look up and select values from a range; return the active cells column letter and row number

Database
Text

Perform mathematical and statistical calculations on worksheet values in a table or list format
Manipulate, compare, format, and extract textual information; convert values to text (and vice versa) Perform conditional calculations using IF statements; compare and evaluate values Return information about the current environment; perform error-checking and troubleshooting
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Logical Information

Logical Function

A function that determines whether a condition is true or false is called a logical function. Excel supports several logical functions such as AND, FALSE, IF, NOT, OR and TRUE. A very common function is the IF function, which uses a logical test to determine whether an expression is true or false, and then returns one value if true or another value if false. The logical test is constructed using a comparison operator that compares two expressions to determine if they are equal, not equal, if one is greater than the other, and so forth. The comparison operators are =, >, >=, <, <=, and <> You can also make comparisons with text strings. You must enclose text strings within quotation marks.
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Using the IF function

The arguments for the IF function are: IF(logical_test,value_if_true,value_if_false) For example, the function =IF(A1=10,20,30) tests whether the value in cell A1 is equal to 10 If it is, the function returns the value 20, otherwise the function returns the value 30 Cell A1 could be empty or contain anything else besides the value 10 and the logical test would be false; therefore, the function returns the value 30 To insert an IF function, click the Insert Function button and search for the IF function, then click OK.

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Excel's date functions 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.

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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.

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Math and Statistical functions

This chart shows some commonly used math and statistical functions and a description of what they do.

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MATCH & INDEX FUNCTION

MATCH function returns the position of a value in a list. Match type can be -1, 0 or 1. If no match type is given, match type =1 is assumed.
1 - largest value less than or equal to lookup value 0 exact match -1 smallest value greater than or equal to lookup value.

INDEX function returns a value occurring at a specific position in an array.

Lookup Function

It allows you to take any value entered, find it in a designated table, then return a value from that same table. Both vertical lookup (VLOOKUP) and horizontal lookup (HLOOKUP) is possible. Syntax of VLOOKUP(lookup value, table range, column index, [range lookup]) Lookup value: value we want to lookup for Table range: is the range of cells in which we try to match up the lookup value. Column Index: Column number in table range from which the lookup value is to be obtained. Range lookup (optional argument): If range lookup is True or omitted, then it tries to find the close match. If range lookup is given as False, an exact match is found and in no exact match is found, excel returns a #N/A response. Note: Firstly, the values in the first column must be sorted ascending, or the LOOKUP will not work. Secondly, since Range_lookup will be left blank, if the Lookup Value is not found, the computer will choose the next lowest value.
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Inserting a Function

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 as shown below.

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Financial Function

Financial functions are very useful to perform financial related operations. Common functions are PV, FV, PMT, PPMT,IPMT etc. 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

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Some financial functions

The PV function calculates the present value of an investment. The FV function calculates the future value of an investment based on periodic, constant payments and a constant interest rate per period. 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 IPMT function provides the interest payment portion of the overall periodic loan payment.

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Financial Function descriptions

This chart shows some commonly used financial functions and a description of what they do.

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