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Introduction to Spreadsheets with Microsoft Excel
A spreadsheet
Formulas
labels
"what-if" analysis
built-in functions
Microsoft Excel
Excel Functions
The Sum function
Autosum
The Max function
The Min function
The Average function
The If function
The Round function
Formatting features
AND function
Relative versus Fixed (Absolute) Addresses

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A spreadsheet is an interactive computer application program for organization and analysis of information in tabular form. Spreadsheets developed as computerized simulations of paper accounting worksheets. The program operates on data represented as cells of an array, organized in rows and columns. Each cell of the array can contain either numeric or text data, or the results of formulas that automatically calculate and display a value based on the contents of other cells. Advantages of a spreadsheet: • A spreadsheet produces a document that can be read, printed, and stored and retrieved. • A spreadsheet can have its calculations done in a fashion by which they may be redone automatically if any of the data values upon which they depend, are changed. • The numbers that appear in a spreadsheet are easily used as the foundation of “charts” or “graphs” that may be used to illustrate the relationships among these numbers. We can build bar charts, pie charts, line charts, etc. In a spreadsheet application, each value sits in a cell. You can define what type of data is in each cell and how different cells depend on one another. The relationships between cells are called Formulas, and the names of the cells are called labels. Formulas depict how to mechanically compute new values from existing values. Once you have defined the cells and the formulas for linking them together, you can enter your data. The user of the spreadsheet can make changes in any stored value and observe the effects on calculated values. This makes the spreadsheet useful for "what-if" analysis since many cases can be rapidly investigated without tedious manual recalculation. In addition to the fundamental operations of arithmetic and mathematical functions, modern spreadsheets provide built-in functions for common financial and statistical operations. Such calculations as net present value or standard deviation can be applied to tabular data with a pre-programmed function in a formula. Spreadsheet programs also provide conditional expressions, functions to convert between text and numbers, and functions that operate on strings of text. Spreadsheets have now replaced paper-based systems throughout the business world. Although they were first developed for accounting or bookkeeping tasks, they now are used extensively in any context where tabular lists are built, sorted, and shared. A modern spreadsheet file consists of multiple worksheets that make up one workbook, with each file being one workbook. Visicalc was the first electronic spreadsheet on a microcomputer, and it helped turn the Apple II computer into a popular and widely used system. Lotus 1-2-3 was the leading spreadsheet when DOS was the dominant operating system. Excel now has the largest market share on the Windows and Macintosh platforms.

Microsoft Excel

You can “launch” the Excel program by clicking its button (shows “X”) or by clicking Start, All Programs, Microsoft Office, Microsoft Office Excel 2003. What appears is a workbook, which is a set of worksheets. Each worksheet may be regarded as a separate document. Spreadsheets share many principles and traits of databases, but spreadsheets and databases are not the same thing. A spreadsheet is essentially just one table, whereas a database is a collection of many tables with machine-readable semantic relationships between them. While it is true that a workbook that contains three sheets is indeed a file containing multiple tables that can interact with each other, it lacks the relational structure of a database. Spreadsheets and databases are interoperable - sheets can be imported into

databases to become tables within them, and database queries can be exported into spreadsheets for further analysis. Note the grid-like appearance of a worksheet. Its columns are labeled by letters (A, B, C, …, Z, AA, AB, AC, …). Its rows are numbered. The intersection of a column and a row is a cell, labeled first by column and then by row. For example, cell C8 is the cell in column C and row 8. An array of cells is called a sheet or worksheet. Data may be entered into the cells of a worksheet in many types, including • Text data: typically consisting of words or phrases; typically used for explanation (e.g., row or column headers); typically not used in arithmetic. Note we may enter more text than a cell, in its current configuration, can display. We can stretch or shrink a column or row by placing the mouse cursor at the right edge of a column margin header or the bottom edge of a row margin header, holding down the left mouse button, and dragging to the desired width or height. • Numeric constants may be entered as text is entered. These values are typically used in arithmetic. • Formulas are used to describe a calculation whose value is to be displayed in the cell. A formula typically starts with the “=” character and may involve a variety of symbols that may be cell references, functions, operators of arithmetic, and constants (numeric, text, etc), as well as “cell ranges”. For example, the formula =C2-B2 instructs the cell in which it appears to display the result of taking the value in C2 and subtracting the value in B2. Notice that the cell reference (name, address) is treated as a variable – the name of a quantity that has a value, which is substituted for the name of the cell in a formula.

Excel Functions

There are hundreds of functions available to Excel users. We’ll talk about some of the mostcommonly used functions. A function is used in a formula with notation of the form nameOfFunction(arguments) where the arguments (also called parameters) are the data values to which the function should be applied. If there are multiple arguments, they are separated by commas. For example: • The Sum function may be used total the values of its arguments. For example, the formula =SUM(B2:B6) uses the SUM function to total the values in the range of cells B2:B6 – that is, the contiguous rectangle of cells whose top left corner is cell B2 and whose bottom right corner is cell B6. The same calculation could alternately be made using the formula =B2+B3+B4+b5+b6 Similarly, if we used =Sum(B2:D2, E5:F8, 27) this would mean compute the sum of all cells in B2:D2 and E5:F8 and the constant 27. This is an example of a function using multiple arguments (they’re separated by commas) and note also that one of its arguments (27) is not a cell reference. Note that a worksheet can be renamed as follows: Double-click on its tab and edit its name. The arithmetic operators are: Operator Explanation + Addition Subtraction (also as leading minus

Example =B2+D2 =C3-B3

* / ^

sign as in constants: -4) Multiplication Division Raise to a power (exponent)

=D9*D10 =G9/G10 =D14^2

Note a cell reference need not be typed into a formula; it can enter a formula via “cursor pointing” (click on the cell). The Sum function can enter a formula by clicking the Autosum button (has a Σ). When you click this button, not only does the Sum function appear in the formula you’re editing, but it does so with a range of cells proposed for its argument list. You may edit this range if the proposal is incorrect.

•

The Max function may be used to compute the maximum value among its arguments. For example, the formula =MAX(B2:B9) computes the maximum value among the cells in the range B2:B9. • The Min function is used to compute the minimum value among its arguments. For example, the formula =MIN(B2:B9) computes the mimimum value among the cells in the range B2:B9. • The Average function is used to compute the average value among its arguments. For example, the formula =AVERAGE(B2:B9) computes the average value among the cells in the range B2:B9. To “wrap text” circularly from “line to line” within a cell: For the cell(s) in which you would like to wrap text, if necessary, stretch the row of the cell to the desired height; click Format, Cells; on the Alignment tab, check the Wrap text checkbox and click OK.

•

The If function is used to choose between two possible ways of making a calculation. For example, the formula =IF(D2<40000, 1%, 1.25%) is interpreted as follows: if D2 (net income) is less than $40,000, then evaluate the formula (for a tax rate) as 1%; otherwise, evaluate the formula as 1.25%. More generally, it’s used in the format If(logicalCondition, trueValue, falseValue) - where the logicalCondition is an expression that evaluates as True or False; the trueValue is the expression to evaluate the If function by if the logicalCondition is True; and the falseValue is the expression to evaluate the If function by if the logicalCondition is False. • The Round function is used to make roundoff part of a calculation. Its form: Round(expression, decimalPlaces) The result of using Round: the value of the expression is rounded off (in the result of the calculation) to the number of decimalPlaces specified by the 2nd parameter. For example, many unrounded calculations of money generate fractions of a penny that may add up, in totals, to apparent errors. To avoid such apparent errors, we can round these calculations. For example, in computing a taxpayer’s tax, the exact calculation =D2*E2 (net income times tax rate) may have fractions of a cent, but =Round(D2*E2, 2) is rounded off to the nearest penny. A new worksheet can be inserted into a workbook by clicking Insert, Worksheet. Another, more complex, example: To pay an hourly employee who may have overtime hours, we can use the formula =IF(C2>40,40*B2 + (C2-40)*B2*1.5, C2*B2)

which we can explain as follows, assuming C2 is the hours worked, 40 is the number of hours used as the overtime theshhold, B2 is the hourly rate of pay: o The condition C2>40 is the test for the existence of overtime. If it’s true, we compensate the employee by using the subformula o 40*B2 + (C2-40)*B2*1.5. This represents two terms. The first term, 40*B2, is the “regular pay” for 40 regular hours at hourly rate B2. The second term, (C2-40)*B2*1.5, is the overtime pay, since C2-40 is the number of overtime hours, which are multiplied by B2 (the base rate of hourly pay) and by 1.5 (the time-and-a-half factor). o Otherwise (if the condition C2>40 is false), the employee has no overtime, hence is paid by the value of C2*B2, the hours times the hourly rate. As above, the possibility of fractions of a penny being calculated and distorting subsequent calculations makes it desirable to modify the formula above to =ROUND(IF(C2>40,40*B2 + (C2-40)*B2*1.5, C2*B2), 2)

•

Notice the use of the AND function. We want to say we have a valid function if and only if Minimum increase < actual increase < maximum increase, or E12 <= E10 <= E13. However, Excel won’t interpret the latter notation correctly. Notice that a chain of inequalities is an abbreviation: The above, interpreted as an algebraic statement, is short for E12 <= E10 and E10 <= E13. Thus, in Excel, we use the formula =AND(E12<=E10, E10<=E13)

Formatting features • A cell with a numeric value may be displayed in the Currency format (shows a currency

symbol such as $) by clicking the Currency button, or the Comma format by clicking the comma button. The percent format is called into play via the Percent button. Other number formats can be chosen by clicking Format, Cells; on the Number tab, choosing the desired Category. Notice the Scientific Notation – for example, the value displayed as -2.2849E+03 represents -2.2849 times 10 to the 3rd power – more generally, the “E” represents “times 10 to the power.” • The default alignments are: text values aligned to the left within their cells; numeric values aligned to the right within their cells. Sometimes these defaults are undesirable. For example, column headers should appear over the data in their columns, but this may not happen in a wide column if we rely on default alignments. We may use the alignment buttons (similar to those of Word) to align data within its cell as appropriate. • You may change font effects such as boldface, italics, underlining, highlighting (fill color), font size, font color, font style, etc., much as in Word. • You may choose various border styles for a cell or group of cells by clicking Format, Cells; on the Border tab, choose the desired border style. • You can control the number of displayed decimal places in a cell by using the Increase Decimals and Decrease Decimals buttons. ……………………………………………………………………………….

**Relative versus Fixed (Absolute) Addresses:
**

Relative cell references are basic cell references that adjust and change when copied or when using AutoFill. Absolute: Situations arise in which the cell reference must remain the same when copied or when using AutoFill. Dollar signs are used to hold a column and/or row reference constant.

For example, to compute for each of several students the student’s percentage, we want to make a calculation of the form (Student’s total) / (total possible) - for the student in row 2, if the total possible is in H15, this might call for a formula such as =H2/H15

and we might then think we can copy this formula down its column – but this doesn’t correctly, because we want H15 to be the denominator in every student’s formula, but, for example, the denominator copies as H16 for the student in row 3. We use the $ character to fix either a row reference or a column reference (or both) in a formula. For example, all of the following refer to cell H15: • H15 – relative in column, relative in row • $H15 – fixed (absolute) in column, relative in row • H$15 - relative in column, fixed (absolute) in row • $H$15 - fixed (absolute) in column and in row

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