Functions in Excel that every MBA (Fin)

should know...
posted Jul 21, 2010, 8:32 PM by Pitabas Mohanty [ updated Jul 21, 2010, 9:02 PM ]
In one of my previous posts, I discussed about a few things about Excel that every MBA student
know. Here, I am going to give a list of functions that every MBA student (particularly those
specializing in Finance) should know. These functions are:
1. IF (very rare to see a model where this function has not been used)
2. AND and OR (often used along with IF)
3. NPV (useful to find the enterprise value if you have used FCF model)
4. IRR
5. XNPV and XIRR (useful in project finance, not used in valuation)
6. PV, FV, PMT, NPER, RATE, IPMT, PPMT (all time value of money functions. You can
download a word and an excel file to get some examples)
7. MIRR (useful to find the modified IRR)
8. PRICE (useful while valuing bonds)
9. ACCRINT (useful to find the accrued interest. Then you can find the dirty price of the bond
by adding this to the clean price)
10. INDEX (You do not need to use LOOKUP, VLOOKUP, HLOOKUP anymore)
11. MATCH (often used with INDEX)
12. SUMIF (useful to annualize quarterly income statements)
13. MOD (I use it for conditional formatting and in converting the quarter no to year no)
14. DATE (always enter the first date using this function)
15. EOMONTH and EDATE (extremely useful to manipulate the dates)
16. SUM
17. AVERAGE
18. SUBTOTAL (I posted separately about this function)
19. SUMPRODUCT (can be used in simple situations as well as complicated situations)
20. ISERROR, ISNA, etc. (Useful to manipulate planned errors in a model)
21. TEXT (use it to change the format of a number within a text)
22. OFFSET (the most powerful function in Excel; one just needs to tell you where such a
function is used. then you can be really creative)
23. TRANSPOSE (used in portfolio modeling)
24. MINVERSE and MMULT (for matrix inverse and matrix multiplication)
Initially you should just know the syntax of these functions and where these functions are used in
actual modeling. A bit of practice is all that is needed to use these functions creatively. Simple
functions like MAX and MIN can be used to build really dynamic model.

This is just a sample list of functions present in Excel. Depending on your usage pattern you can use
other functions present. In my forthcoming book, I have just discussed about these functions only. So
just got this list from that chapter.