Introduction to

Microsoft Excel
Pre-Class Material

Copyright 2009 Investment Banking Institute

www.ibtraining.com
Table of Contents

I. Excel Overview

II. The Basics

III. Formatting

IV. Popular Functions

V. Excel Shortcuts

2
Excel Overview
Excel is a powerful spreadsheet program used to store, manipulate,
analyze and visualize data
It is the most widely adopted spreadsheet application in the world
Component of Microsoft Office, along with Word, PowerPoint and Access
At its most basic level, Excel provides a way to store massive amounts
of data in a structured manner
A single file can contain billions of cells, which can all be linked together
In addition to storage, however, Excel can handle complex mathematical
calculations, reporting and chart creation
Below are some examples of popular tasks you can accomplish:
9 Data sorting and storage
9 Numeric analysis and charting
9 Financial and statistical modeling
9 Report generation

Excel is used extensively in investment banking

All financial models, databases, tables and charts are created in Excel

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Proficiency Expectation
Excel is a junior bankers (associate or below) best friend
A very large percentage of your time will spent using Excel
Junior bankers are expected to operate all functions of Excel
without using the mouse
Strong Excel proficiency is taught on the job, however, it is
wise to be familiar with the application prior to interviewing if
you intend to work in this industry
You should be comfortable with the following:
Navigation between cells and worksheets
Writing formulas (standard math equations and Excel-specific
functions)
Cell referencing (i.e. linking cells to one another)
Formatting cells (e.g. data and text)
Formatting worksheets (e.g. layout and structure)
Prior to your first IBI class, please practice all of the above
We will be using Excel greatly over the next month

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Table of Contents

I. Excel Overview

II. The Basics

III. Formatting

IV. Popular Functions

V. Excel Shortcuts

5
Structure
Files in Excel are called workbooks
A workbook is made up of spreadsheets called worksheets,
which are organized in tabs at the bottom of each workbook
You can insert up to 255 worksheets in a single workbook depending
on your computers memory
Each worksheet is structured as a grid, which is comprised of
rows and columns
Rows represent the y-axis and are numbered along the left
Columns represent the x-axis and are headed by letters along the top
An intersection of a row and a column is called a cell
Cells are used to store and present data and/or formulas
Data is expressed in the form of numbers (e.g. 569) or text (e.g.
Hello)
Formulas are used to execute a particular function/calculation or
reference another cell or application
Every cell has its own unique identifier or coordinate, which reflects
the respective row and column it is in
9 For example: cells B12, AJ4, H203
9 The column letter always precedes the row number

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 Layout

Menu Bar
Standard
Toolbar
Formatting
Toolbar

Cell
Reference Formula
Box (i.e. A1) Box

Cell D6 Row 6

Column D

Worksheet Tab Worksheet Tabs

Scroll Buttons

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Toolbars
Standard Toolbar
Copy
Print
New Save Preview Cut Paste Undo/Redo AutoSum Sort Drawing Help

Open Print Spell Paint Insert Function Chart Zoom More

Check Brush Hyperlink Wizard
Email

Formatting Toolbar
Increase/
Merge Percent Decrease Font
Font Menu Bold, Italicize, Underline Cells Style Decimal Border Color

Font Size Right, Center, Left Currency Comma Increase/ Fill Color More
Justification Style Style Decrease
Indent

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Equations, Functions and References
In addition to entering data or text within a cell, you can:
Write equations to perform standard math functions
For example: =5+6, =109/(78-16)^2
All equations must begin with an =, + or - sign
The order of operations is in effect
Write special functions to execute a pre-set formula in Excel
For example: =SUM(6,3,8,2), =MIN(9,4), =IF(5+3=8, yes,
no)
9 =SUM( ) --> summation of data
9 =MIN( ) --> finds the minimum from a set of data
9 =IF( ) --> conditional statement with a TRUE or FALSE output
For a function to exist within a cell, an = must be the first entry in
the formula box
All functions begin with a function name, followed by a set of
parentheses, which encapsulate the inputs required by the function
9 Inputs are separated by commas (,)

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Equations, Functions and References (cont.)

Create references or links to other cells

For example: =G14
Referencing another cell delivers the output of that cell into the
active cell
9 Therefore, if cell G14 = 72, then a reference to cell G14 would retrieve the
value 72
Similar to equations, all cell references must begin with an =, +
or - sign

Equations, functions and references are not mutually exclusive

All three (3) practices can be included within one cell
For example: =B16/SUM(5,F67:F78)^3
9 A colon between two cells represents a range by where all the cells in
between are also included

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Auditing
Cell referencing is a necessary practice in financial modeling
A workbook with many worksheets may perhaps only have one
worksheet devoted to hard inputs (e.g. assumptions tab) with the
rest comprised fully of links
As such, recognizing the flow of data within a model is a very
important aspect of understanding the model
In addition, wrong links are the most common mistakes for an
incorrect model
Therefore, Excel provides an auditing tool to track the
relationships between linked cells
Specifically, for any cell there is the ability trace its precedents
and see its dependents
Trace/Delete Remove Insert
Dependents All Arrows Comment

Trace/Delete Trace Circle/Remove

Precedents Errors Invalid Data
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Common Output Errors
Below are a list of common output errors users experience
#REF!
Occurs when a cell reference is not valid
Very common when you delete a row or column that contained a cell
with dependents
#N/A
Occurs when a value is not available to a function or formula
For example, using an argument in an array formula that does not
have the same number of rows or columns as the range that contains
the array formula
#VALUE!
Occurs when the wrong type of argument or operand is used
For example, entering text when a formula requires a number or a
logical value, such as TRUE or FALSE
#NUM!
Occurs with invalid values in a formula or function
Common in iterative functions, such as IRR or RATE, where Excel
cannot find a result
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Common Output Errors (cont.)
#NULL!
Occurs when you specify an intersection of two areas that do not
intersect
Often happens if you forget to separate ranges with a comma in a
function
#NAME?
Occurs when Excel does not recognize text in a formula
Common causes are (i) misspelling a function name, (ii) forgetting
to use quotations around text within a formula or (iii) using the
wrong syntax when referencing other worksheets
#DIV/0!
Occurs when a formula divides by zero or a blank cell
#######
Occurs when the numbers or text displayed in the cell are too
long for the column width

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Common Output Errors (cont.)
Errors are very problematic due to the linked nature of cells in
financial models
A single cell error may carry-forward in a domino-effect into
every dependent cell, either through direct reference or indirect
reference
To prevent this from happening, bankers like to use the ISERROR
Function to make sure error cells return useable data
The ISERROR Function returns TRUE if the value is any type of
error (e.g. #REF!, #N/A, #VALUE!, etc.)
=ISERROR(value); is often used in conjunction with IF statements
(discussed in further detail in Section IV)
For example: cell B19 = #REF!
=IF(ISERROR(B19),0,B19 --> NA
This ensures that if cell B19 is an error, then put 0 in its place,
otherwise leave B19 as it is

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Excel Help
Get used to using the Help
menu (last selection in the
menu bar)
It is an excellent resource
for questions you may
have
9 out of 10 times, your
answer will be found in
the Help menu
Even a list of shortcuts
can be found here
Google is also a great
resource for help with
Excel

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Table of Contents

I. Excel Overview

II. The Basics

III. Formatting

IV. Popular Functions

V. Excel Shortcuts

16
Formatting Spreadsheets
Properly formatting is a crucial skill in investment banking
As a client-oriented business, there is naturally a significant focus
on presentation
In addition, because banks solicit investors and/or buyers on their
clients behalf, it is necessary that all materials look clean,
organized and professional
It is often said that a good-looking presentation with all the
wrong numbers is actually better than a sloppy presentation
with all the correct numbers
Proper formatting is very important when building models
Formatting adds another layer of distinction to numbers, which in
turn facilitates understanding of the model
In addition, a clean and well-organized layout enables a model to
scale better

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Color Coding
Numeric data that is inputted directly in a cell (i.e. not
referenced from another cell) is called a hard input
For example: =5, =5+6 or =SUM(5,6,7)
Cells that contain only hard inputs are always formatted in BLUE
This represents standard convention across Wall Street
Cells that contain only reference data are always left BLACK
For example: =H32, =H32+K84 or =SUM(H32:H40, K84)
This represents standard convention across Wall Street
In instances where a cell contains both a hard input and a cell
reference, the cell is commonly formatted GREEN
For example: =5+H32 or =SUM(H32:H40,6)
There is no standard across Wall Street
This scenario is usually avoided as it is considered poor modeling
etiquette to include both a hard input and a cell reference in one
cell

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Formatting a Cell
Cell formatting can be found in the menu bar under Format
Highlight one or many cells to format at once

Data should never be left

unformatted unless it is text

Be consistent with decimal

places

Negative numbers should

always be in parentheses

Only the first and total $5.0

2.2
numbers should have a 3.5
currency symbol in front $10.7

Protecting cells, sheets or

workbooks makes the
information read-only

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Conditional Formatting
Conditional formatting allows a cell to automatically change
its format depending on a specific condition you set
For example: If a cells output is greater than 25, then format it
BOLD and PURPLE, otherwise format it ITALICIZED and RED
Conditional formatting can be found in the menu bar under
Format

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Copying and Pasting
Copying and pasting cells is used a great deal in Excel to avoid
retyping repetitive formulas or functions
A cell reference that is copied and pasted from one cell into
another will move its coordinates accordingly (i.e. by the same
number of rows and columns as the cell itself)
For example: if a cell is referencing data from a cell 20 rows above
and 11 columns to the left, regardless of where the copied cell is
pasted, the cell reference will remain looking 20 rows above and 11
columns to the left, the only difference being from a new location
Sometimes, when you copy and paste a cell reference, you do not
want the coordinates to change
Locking a cell reference is called anchoring a cell
You can anchor either just the row, just the column or both
Anchoring a cell involves putting a $ sign in front of the row and/or
column you want to lock
9 =B6 --> =$B6 or =B$6 or =$B$6

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Copying and Pasting (cont.)
When you copy and paste a cell, you copy and paste all the
data and formatting characteristics of that cell
There are instances where you may only want to copy certain
characteristics, such as just the value, formula or format
Paste Special allows you to pick and choose the aspect(s) you
want to paste

Paste Special is found in the

menu bar under Edit
To protect sensitive formulas,
bankers often paste over their
models with Paste Special -
Values before they send it to
prospective investors or buyers
Paste Special- Formats is also
frequently used by bankers

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Page Setup and Print Ranges
Get in the habit of setting margins and print ranges when you
work in Excel
Having tables and graphs fit appropriately on a page with page
breaks in logical places is an important part of formatting
Page Setup is found in the menu bar under File
Print ranges can be set in Page Setup or in Page Break Preview under
View in the menu bar

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Table of Contents

I. Excel Overview

II. The Basics

III. Formatting

IV. Popular Functions

V. Excel Shortcuts

24
Popular Math Functions
SUM Function: SUM(number1,number2,)
Adds all the numbers in a range of cells
AVERAGE Function: AVERAGE(number1,number2,)
Returns an average of its arguments, which can be numbers or
names, arrays or references that contain numbers
MEDIAN Function: MEDIAN(number1,number2,)
Returns the median, or the number in the middle of a set of given
numbers
MIN Function: MIN(number1, number2,)
Returns the smallest number in a set of values. Ignores logical
values and text
MAX Function: MAX(number1, number2,)
Returns the largest number in a set of values. Ignores logical
values and text

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Popular Math Functions (cont.)
ROUND Function: ROUND(number,num_digits)
Rounds a number to a specified number of digits
For example: =ROUND(5.156,1) --> 5.2
COUNT Function: COUNT(value1,value2,)
Counts the number of cells that contain numbers and numbers
within a list of arguments
COUNTA( ) --> Counts the number of cells that are not empty

12 <- 1 0 <- 1 x <- 1

44 <- 1 0 <- 1 x <- 1

6 <- 1 0 <- 1 x <- 1

9 <- 1 0 <- 1 x <- 1

7 <- 1 0 <- 1 x <- 1

-2 <- 1 0 <- 1 x <- 1
83 <- 1 0 <- 1 x <- 1
COUNT( ) --> 7 COUNT( ) --> 7 COUNTA( ) --> 7

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Popular Statement Functions
IF Statement: IF(logical_test,value_if_true,value_if_false)
Returns one value if a condition you specify evaluates to TRUE
and another value if it is FALSE
For example: cell B7=5
=IF(B7<10,1,2) --> 1
=IF(B7<10,yes,no) --> yes
Nested IF statements are IF statements inside of IF statements
For example: cell B7=5 and H4=good
9 =IF(B7<4,yes,IF(H4=good,yes,no)) --> yes
9 Therefore, if cell B7=5 or H4=good, then the outcome will be yes
otherwise it will be no
COUNTIF Statement: COUNTIF(range,criteria)
Counts the number of cells within a range that meet the given
condition
yes <- 1
For example: =COUNTIF(range,yes) yes <- 1
no
yes <- 1
COUNTIF( ) --> 3

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Popular Statement Functions (cont.)
AND Statement: AND(logical1,logical2,)
Returns TRUE if all arguments are TRUE and returns FALSE if any
argument is FALSE
For example: cell B7=5; C4=6
=IF(AND(B7,C4)=5,yes,no) --> no
OR Statement: OR(logical1,logical2,)
Returns TRUE if any argument is TRUE and returns FALSE if all
arguments are FALSE
For example: cell B7=5; C4=6
=IF(OR(B7=5,C4=5),yes,no) --> yes
NOT Statement: NOT(logical)
Reverses the logic of its argument: returns FALSE for a TRUE
argument and vice versa
For example: cell B7=5
=IF(NOT(B7)=5,yes,no) --> no

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Table of Contents

I. Excel Overview

II. The Basics

III. Formatting

IV. Popular Functions

V. Excel Shortcuts

29
Excel Shortcuts
As mentioned earlier, junior bankers are expected to operate
all functions of Excel without using the mouse
Regardless of how fast you think you are at using the mouse,
divide your time by half and thats how much faster you will
be with just the keyboard
All functions in Excel can be accessed via the keyboard
For example, notice the underlined letter in each title in the
menu bar
Holding down the ALT key and the underlined letter at the same
time gives you access to that particular menu
The same method of navigation works for all sub-headers too
Excel has implemented keyboard shortcuts for common functions
and tools to collapse the navigation time even more
Common I-banking Excel shortcuts are on the following slides
Unfortunately, these shortcuts are not designed for Windows Vista or
MAC OS

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Excel Shortcuts (cont.)
Navigating in Excel Switch between Worksheets CTRL-PageUp/CTRL-PageDown
Navigating in Excel Switch between Workbooks CTRL-Tab
Navigating in Excel Move one character up, down, left, or right. Arrow keys
Navigating in Excel Go to end of a contiguous range CTRL-Arrow Keys
Navigating in Excel Select a cell range SHIFT+Arrow keys
Navigating in Excel Highlight a contiguous range SHIFT-CTRL-Arrow Keys
Navigating in Excel Select entire worksheet CTRL+A
Navigating in Excel Move to the beginning of the line. HOME
Navigating in Excel Go To F5
Navigating in Excel Move a Sheet/Copy a Sheet Alt-E-M
Navigating in Excel Change Zoom Sizing Alt-V-Z
Entering and editing data Complete a cell entry and select
Entering and editing data ...the cell below. ENTER
Entering and editing data ...the previous cell above. SHIFT+ENTER
Entering and editing data ...the next cell to the right. TAB
Entering and editing data ...the previous cell to the left. SHIFT+TAB
Entering and editing data Delete cell and then get inside the cell BACKSPACE
Entering and editing data Delete cell/selection. DELETE
Entering and editing data
Entering and editing data Edit inside a cell (edit cell mode) F2
Entering and editing data Once inside edit cell mode (F2)
Entering and editing data ...Start a new line in the same cell. ALT+ENTER
Entering and editing data ...Highlight individual characters within cells SHIFT+Arrow keys
Entering and editing data ...Highlight contiguous string within cells SHIFT+CTRL+Arrow keys
Entering and editing data ...Delete the preceding character. BACKSPACE
Entering and editing data ...Delete the character to the right of the insertion point. DELETE
Entering and editing data ...Cancel a cell entry. ESC
Entering and editing data
Entering and editing data Spell Check. F7
Entering and editing data Insert a comment. SHIFT+F2
Entering and editing data Fill down. CTRL+D
Entering and editing data Fill to the right. CTRL+R
Entering and editing data Undo the last action. CTRL+Z
Entering and editing data Redo the last action. F4 or CTRL+Y
Hiding / Unhiding Rows and Columns Hide the selected rows. CTRL+9
Hiding / Unhiding Rows and Columns Unhide any hidden rows within the selection. CTRL+SHIFT+( (opening parenthesis)
Hiding / Unhiding Rows and Columns Hide the selected columns. CTRL+0 (zero)
Hiding / Unhiding Rows and Columns Unhide any hidden columns within the selection. CTRL+SHIFT+) (closing parenthesis)

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Excel Shortcuts (cont.)
Selecting, grouping, inserting, and deleting cells Highlight Entire Row SHIFT+SPACEBAR
Selecting, grouping, inserting, and deleting cells Highlight Entire Column CTRL+SPACEBAR
Selecting, grouping, inserting, and deleting cells Group Rows or Columns SHIFT+ALT+RIGHT ARROW KEY
Selecting, grouping, inserting, and deleting cells Ungroup Rows or Columns SHIFT+ALT+LEFT ARROW KEY
Selecting, grouping, inserting, and deleting cells Clear the contents of the selected cells. DELETE
Selecting, grouping, inserting, and deleting cells Delete the selected cells. CTRL+MINUS SIGN
Selecting, grouping, inserting, and deleting cells Insert blank cells. CTRL+SHIFT+PLUS SIGN
Copying and Pasting Copy the selected cells. CTRL+C
Copying and Pasting Cut the selected cells. CTRL+X
Copying and Pasting Paste copied cells. CTRL+V
Copying and Pasting Copy, then Paste Special Formats CTRL+C, Alt-E+S+T
Copying and Pasting Copy, then Paste Special Formulas CTRL+C, Alt-E+S+F
Formatting Data Display the Style dialog box. ALT+' (apostrophe)
Formatting Data Display the Format Cells dialog box. CTRL+1
Formatting Data Applies the general format CTRL+SHIFT+~ 1254.34
Formatting Data Number format: 2 dec places, thousand separator, and minus sign () for neg values. CTRL+SHIFT+! 1,254.34
Formatting Data Currency format: 2 decimal places (negative numbers in parentheses). CTRL+SHIFT+$ $1,254.34
Formatting Data Percentage format with no decimal places. CTRL+SHIFT+% 125434%
Formatting Data Exponential number format with two decimal places. CTRL+SHIFT+^ 1.25E+03
Formatting Data Date format with the day, month, and year. CTRL+SHIFT+# 7-Jun-03
Formatting Data Time format with the hour and minute, and AM or PM. CTRL+SHIFT+@ 8:09 AM
Formatting Data
Formatting Data Boldface CTRL+B 1,254.34
Formatting Data Italicize CTRL+I 1,254.34
Formatting Data Underline CTRL+U 1,254.34
Formatting Data Strikethrough CTRL+5 1,254.34
Formatting Data
Formatting Data Apply the outline border to the selected cells. CTRL+SHIFT+& 1,254.34
Formatting Data Remove the outline border from the selected cells. CTRL+SHIFT+_ 1,254.34
Enter and calculate formulas Start a formula. = (equal sign) =F45*G12
Enter and calculate formulas In a formula, display the Insert Function dialog box. SHIFT+F3
Enter and calculate formulas Insert an AutoSum formula with the SUM function. ALT+= (equal sign)
Enter and calculate formulas Copy the value from the cell above into the cell or the Formula Bar. CTRL+SHIFT+" (quotation mark)
Enter and calculate formulas Copies a formula from the cell above cell into the cell or the Formula Bar. CTRL+' (apostrophe)
Enter and calculate formulas Alternate between displaying cell values and displaying formulas. CTRL+` (single left quotation mark)
Enter and calculate formulas Recalculate all worksheets in all open workbooks. F9
Enter and calculate formulas Anchoring "Fixing" Cells F4 - must be in edit cell mode (F2) =$F$4*G125
Enter and calculate formulas Go to precedent cell(s) CTRL-[
Enter and calculate formulas Highlight dependent cells F2
Enter and calculate formulas Auditing Toolbar (Go to precedent and dependent cells) Alt-T-U

32
Excel Shortcuts (cont.)
Special characters Press F2 to edit the cell, turn on NUM LOCK, and then press the following keys by using the numeric key pad:
Special characters Cent . ALT+0162
Special characters Pound sterling . ALT+0163
Special characters Yen . ALT+0165
Special characters Euro . ALT+0128
Naming cells, Hyperlinks, inserting time and date Name a cell. CTRL+F3
Naming cells, Hyperlinks, inserting time and date Insert a hyperlink CTRL+K
Naming cells, Hyperlinks, inserting time and date Activate a hyperlink. ENTER (in a cell with a hyperlink)
Naming cells, Hyperlinks, inserting time and date Enter the date. CTRL+; (semicolon)
Naming cells, Hyperlinks, inserting time and date Enter the time. CTRL+SHIFT+: (colon)
Naming cells, Hyperlinks, inserting time and date Display a drop-down list of the values in the current column of a list ALT+DOWN ARROW

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