OVERVIEW OF MICROSOFT EXCEL

Lesson one: Starting the Program

There are different ways to create a workbook. Normally you create a workbook within the Excel
application. However, you can also create an Excel workbook without starting the Excel
application.

To create a workbook from the windows desktop:

Right-click on the windows The Excel icon Type in the file

desktop, select New >> appears on name and press
Microsoft Excel Workbook the desktop. <Enter>.
from the menu. The workbook is
created and saved in
the desktop folder.

Step Action
To create workbook within Excel application, you can
1 Create new default workbook.

2 Create a new workbook using a template. There are many built-in templates in Excel 2010. You
can also create your own templates if you want.

3 Using any method, determine which contestant will make the first selection.
Navigating in a Workbook

The Excel 2010 program window is easy to navigate and simple to use. It is designed to help
you quickly find the commands that you need to complete a task.

A workbook is the file Excel creates to store your data. Generally, a workbook should deal
with related data. We use workbooks to store downloaded transactions for reports from
Financials, capture timesheet details or track staff vacation and sick time. In your workbook,
there might be a sheet for each employee in your department or cost center. The default new
workbook in Excel 2010 has three worksheets; you can add more
worksheets or delete existing worksheets as needed. Each worksheet consists of 1,048,
576 rows (numbered 1 through 1,048,576) and 16,384 columns (labeled A through
XFD). The box formed by the intersection of a row and column is called a cell. Each cell is
identified by its address, which consists of its column letter and row number (e.g. cell D1 is the
cell in the fourth column and the first row).

Groups of cells are called a range. A range is identified by the addresses of the cells in the
upper-left and lower-right corners of the selected block of cells, separated by a colon
(e.g., A1:C10). Only one cell can be active at a time. The active cell as a thick black
border around it and its address appears in the Name box on the left end of the Formula
bar.

When you open a new workbook, the active cell is cell A1, the top-left cell in the
worksheet. Cell A1 is referred to as home. The mouse pointer displays as a thick white
cross when you move it across the cells in worksheet. When you point at a Ribbon or
worksheet tab, a command button or menu item, the pointer turns into a white arrow.
Element Description

Title bar Displays the name of the workbook and the program.

Minimize, Restore Controls the program window. Use the Minimize button to hide the window. Use
Down/Maximize and the Restore Down/Maximize button to adjust the size of the window. Use the
Close buttons Close button to exit Excel.

Quick Access toolbar Contains frequently used commands that are independent of the tab
displayed on the Ribbon.

Ribbon Contains all the commands related to managing workbooks and working with
workbook content.

Formula bar Displays the data or formula stored in the active cell. It can also be used to
enter or edit a formula, a function, or data in a cell.

Name box Displays the active cell address or the name of the selected cell, range, or
object.

Workbook window Displays a portion of the worksheet.

Sheet tabs Each tab represents a different worksheet in the workbook. A workbook can
have any number of sheets, and each sheet has its name displayed on its sheet
tab.

Scroll bars Used to move downard through a worksheet.

 Element Description

Status bar Displays various messages as well as the status of the Num Lock, Caps Lock,
and Scrool Lock keys on the keyboards.

View Shortcuts toolbar Used to display the worksheet in a variety of views, each suited to a specific
purpose.

Zoom Level button Used to change the magnification of the worksheet.

Zoom slider

Selecting Cells Range in Workbook

You must select the cell (activate the cell) before you add information to it. Once you
have selected a cell or range, you may make changes to all selected cells simultaneously.

A group of selected cells is called a range. A range can contain a block of cells, a
complete column, a complete row or a non-adjacent range.

A cell A block of cells A complete column A complete row

Moving around in a range of cells - shortcut keys

Press Action:
<Tab> Move one cell to the right
<Shift> + <Tab> Move one cell to the left
<Enter> Move one cell down
<Shift> + <Enter> Move one cell up

Move between worksheets

Use the shortcut keys <Ctrl>+<Page Down> to move to the next worksheet and press
<Ctrl>+<Page Up> to move to the previous worksheet.

Selected non-adjacent cells range

A non-adjacent range consists of separate blocks of cells that are selected at the same time.
A selected range is shaded except for the active cell, information appears in that active cell
when you type.

Active cell
Customizing the Quick Access Toolbar

By default, the Quick Access toolbar is located at the left end of the Title bar and displays the
Save, Undo, and Redo button. You can change the location of the Quick Access
toolbar and customize it to include commands that you use frequently.

To add a command to the Quick Access toolbar:

Step Action

1 On the Ribbon, click the appropriate tab or group to display the command
that you want to add.

2 Right-click the command and select the Add to Quick Access Toolbar from
the shortcut menu.

To remove a command to the Quick Access toolbar:

Step Action

1 On the Quick Access toolbar, right-click the command that you want to
remove and select Remove form Quick Access Toolbar from the shortcut
menu.

2 Right-click the command and select the Add to Quick Access Toolbar from
the shortcut menu.

Exploring the Ribbon

The Ribbon is located below the Title bar. Across the top of the Ribbon is a set of task-
specific tabs. Some tabs, known as contextual tabs, appear only when you create or select
certain types of objects (e.g., pictures, tables, charts). Clicking a tab displays an
associated set of commands that are organized into logical groups. Commands generally
take the forms of buttons an lists. Some commands appear in galleries. The appearance of the
buttons and groups on the Ribbon changes depending on the width of the program
window. A button representing a command that cannot be performed on the selected
element is inactive (gray).
 Element Description

File Displays the Backstage view containing commands related to

managing files and customizing the program. The File tab replaces the
Microsoft Office button and File menu used in earlier releases of
Microsoft Office.

Home Contains the basic Clipboard commands, formatting commands, style

commands, commands used to insert and delete rows or columns,
and various worksheet editing commands. The Home tab is active by
deafult.

Insert Contains commands related to all the items you can insert in a
worksheet.

Page Layout Contains commands that affect the overall appearnace of a

worksheet, including some settings that deal with printing.

Formula Contains commands used to insert a forum, name a cell or a rage,

audit a formula, or control how Excel performs calculations.

Data Contains Excel‘s data-related commands.

Review Contains commands used to check spelling, translate words, add

comments, or protext worksheets.

View Contains commands that control various aspects of how a worksheet

is viewed.

Using Dialog Box Launchers

Some groups on the Ribbon have related dialog boxes or task panes that contain
additional commands. These commands are access by clicking the dialog box launcher.
Minimizing and Expanding the Ribbon
You can minimize the Ribbon to make more space available on the screen. When the
Ribbon is minimized, only the tab names are visible.

To minimize the Ribbon:

Click the Minimize the Ribbon button located at the right of the Ribbon. Or, press
Crlt+F1.

To minimize the Ribbon:

Click the Minimize the Ribbon button located at the right of the Ribbon. Or, press
Crlt+F1.
Lesson 2: Basic Workbook Skills
Overview
In this lesson, we‘ll get acquainted with how to perform basic tasks such as moving
around a worksheet, selecting cells, working with rows and columns, and entering and
editing data. By the end of the lesson, you‘ll be able to:

Navigate within the worksheet

Identify the shortcut keys
Add data to a worksheet
Edit existing data on a worksheet
Set a print area
Update the column headings
Add comments to a specific cell

Moving around a worksheet

There are various ways to navigate through a worksheet. Using the mouse or keyboard, you
can move from cell to cell, move up or down a page at a time, or move to the first or last used
cell in the worksheet. You can also navigate to a specific cell in the worksheet by entering its
address in the Name box.
Navigating with the mouse
Use the mouse to change the active cell. If the cell you want to select is not visible in the
workbook window, you can use the scroll bars to scroll through the worksheet in any
direction.
Scrolling with the mouse does not change the location of the active cell. To change the
active cell, you must click a new cell after scrolling.

Navigating with the keyboard

Use the navigational keys to move around a worksheet.
Key Action
Down arrow or Enter Moves the active cell one cell down.

Up arrow or Shift+Enter Moves the active cell one cell up.

Right arrow or Tab Moves the active cell one cell to the right.

Left arrow or Shift+Tab Moves the active cell one cell to the left.

Page Down Moves the active cell down one page.

Page Up Moves the active cell up one page.

Alt+Page Down Moves the active cell right one page.

Alt+Page Up Moves the active cell left one page.

Ctrl+Home Moves the active cell to cell A1.

Ctrl+End Moves the active cell to the last used cell in

the worksheet.
Selecting Ranges

In order to perform an operation on a range of cells in a worksheet, you need first select the
range. When a range is selected, every cell in the range is highlighted, except for the active
cell.

Step Action

To select a range:

1 Drag the mouse pointer from the first cell in the range to the last cell. Or, select the first
cell in the rage, hold down the Shift key, and then select the last cell in the range.

To select non-adjacent ranges:

2 Drag to select the first range, hold down the Ctrl key, and then drag to select the
second range.

Note: To deselect a range, press any arrow key or click any cell in the worksheet.

Adjacent Cells Non Adjacent Cells

Step Action

How to Select a Single Cell

Click at the cell that you want to select. The Name box on the left of the formula bar shows
which cell is active.

To Select a Range of Cells:

Click the cell B2 and drag to the cell C4. (for example: Cell B2 is the first cell while the cell C4 is the
last cell of the selection range. The range B2:C4 is then highlighted, as shown below.
Step Action

To select a range of cells using click and drag:

Hold down <Shift>.

Excel marks the cell B2 as the beginning of the selection.

Click the cell C5.

This is the last cell of the selection. A range of B2:C5 is selected, as shown below.

TIPS

You can also use the arrow keys (,,,) to select a range. Hold down <Shift> and press
arrow key to select range.
Do It! Examining Excel window components
Here’s how
Click Start and choose
All Programs
Microsoft Office
Microsoft Excel 2010
Choose Don‘t make changes.
Click OK
Observe the title bar
Observe the Ribbon tabs
Observe the Home tab
Click the Insert tab
In the Illustrations group, click
Shapes
Click the Home tab
In the Font group, point to B
Observe the formula bar
Observe the status bar
Here’s why
To start Microsoft Excel
(If necessary.) To close the Welcome to
Microsoft Office 2010 dialog box.
Book 1 - Microsoft Excel
The title bar shows the name of the current
workbook, ―Book1‖ and the name of the
program.
By default, Home is active.
The Home tab contains the Clipboard, Font,
Alignment, Number, Styles, Cells, and Editing
groups.
(Next to the Home tab.) To activate it,
Commands related to the Insert command
are displayed here.
To display the Shapes gallery. You can select a
shape and then click a cell to place the
share there.
To display the Home tab‘s groups again.
(The Bold button.) A ScreenTip appears,
showing the command name, its keyboard
shortcut and a brief description.
(The formula bar is below the Ribbon.) The
formula bar displays the idea in the active
cell. Currently, none of the cells contain data.
(At the bottom of the Excel window.) The
status bar provides information about
selected commands and the current status of
the workbook. The status bar also contains
tools for switching the view of the current
document, zooming in and out on the
current document, and switching to other
documents.
Saving and updating workbooks

When you save a file, you can save it to a folder on your hard disk drive, a network
location, CD, DVD, the desktop, flash drive, or save as another file format. While you must
identify the target location, if it is different than the default folder, the saving process is the
same regardless of what location you choose.

Saving a file
Step Action

1 Click From Ribbon.

2 Under Available Templates, click Blank Workbook.

3 In the File name box, type Name.

Excel has already entered a placeholder name in the File name box before you type
your own file name. Since the name is highlighted, you just need to type in the new file
name to overwrite it without having to click in the box.

4 Click Save button.

Saving Workbook in a different format

Step Action

1 Click File tab.

2 Click Save As.

3 In the File name box, type Name.

Excel has already entered a placeholder name in the File name box before you type
your own file name. Since the name is highlighted, you just need to type in the new file
name to overwrite it without having to click in the box.

4 In the Save as type list, click the format that you want to save the file in. For
example, click PDF, or Comma Delimited (.csv).

5 Click Save button.

Lesson 3: Modifying a worksheet

Overview

In this lesson, we‘ll get acquainted with how to perform basic tasks such as moving
around a worksheet, selecting cells, working with rows and columns, and entering and
editing data. After completing this lesson, you‘ll know how to:

Navigate within the worksheet

Edit existing data on a worksheet
Using AutoFill
Set a print area
Update the column headings
Add comments to a specific cell

Text in cells can be any length, and you can change the text‘s formatting, such as its font and
size. By default, text in a cell is left-aligned.

Text and values

As soon as you create a workbook, you can start entering data in cells. Cell entries can include
many types of data, including text and values. When you type, data is entered in the active
cell.

Use any length of text in cells and change the text‘s formatting, such as its font and size. By
default, text in a cell is left-aligned (See below).

Values can include numbers, formulas and functions. Excel recognizes cell data as a value when
it‘s number or when it begins with +, -, =, @, #, or $. By default, a value in a cell is right-
aligned.

Cell Data is classified according to its intended purpose.

Overflow text and values

If your text doesn‘t fit in a cell, it appears to go into the next cell if that adjacent cell is
empty. The text isn‘t actually in that adjacent cell, however-if there is data in the adjacent cell,
the overflowing text is truncated to fit the width of its cell.
If a long value doesn‘t fit in a cell. Excel displays a row of # characters. This indicates that the
cell is too narrow to display the value in full.

The Num Lock key (for desktop computers)

Many desktop keyboards have a numeric keypad, which is enabled and disabled by a NUm Lock
key in the upper-left corner of the keyboard. Press Num Lock once to switch the
keypad from functioning as numeric keys to functioning as navigation keys. Press Num
Lock again to return to number entry. When number entry is active, a Num Lock light
typically lights on the keyboard.

The label classification is used for cells that contain text or for numbers that will not be used
in calculations.

A value classification indicates that the data has the potential to be used in calculations.

Editing text and values

If you make a mistake while entering data in a cell, you can correct it at any time. To make
edits, do any of the following:
Select the cell and type the new data
Click the formula bar, make the edits and press Enter.
Double-click the cell to place the insertion point in it, make the desired edits and press
Enter.
AutoFill

When you want to enter a series of numbers, days of the week, or other sequential data, you
can use the AutoFill feature to complete the list. The fill handle is a small square in
the lower-right corner of a selected cell or range of cells. When you point to the fill
handle, the pointer changes to a plus sign (+). You can then drag the pointer downward to fill
a range with data.

To use AutoFill:
1. Select the cell containing the value that starts the list or series.
2. Point to the fill handle until the pointer changes to a + symbol.
3. Drag the fill handle over the adjacent cells that you want to fill.

For numbers or dates, select two cells with a desired range, and AutoFill continues with the
same increments. For example, you could use this technique to fill a range by 10s or to fill a
range with dates a week apart.
Formatting Cells

Formatting is applied to spreadsheet components for the purpose of organizing and

clarifying information. Data that is presented in a uniform and consistent format is much
easier to understand than data presented with random formats. Formatting can be
applied to pages, columns, rows, cell ranges, and cells. Formatting features include:

Step Action

1 Select the cells that you want to format.

2 On the Home tab, in the Number group, click the Dialog Box Launcher next to Number
(or just press CTRL+1).

3 In the Category list, click the format that you want to use, and then adjust settings, if
necessary. For example, if you‘re using the Currency format, you can select a different
currency symbol, show more or fewer decimal places, or change the way negative numbers
are displayed.

Borders and Shading

Step Action

1 Select the cell or range of cells that you want to add a border to.
Step Action

2 On the Home tab, in the Font group, click the arrow next to Borders, and then click the
border style that you want.

Apply Font Shading

Step Action

1 Select the cell or range of cells that you want to apply cell shading to.
On the Home tab, in the Font group, click the arrow next to Fill Color Button image, and
2
then under Theme Colors or Standard Colors, click the color that you want.

Filter your data

Step Action

1 Select the data that you want to filter.

On the Data tab, in the Sort & Filter group, click Filter.
2

3 Click the arrow in the column header to display a list in which you can make
filter choices.
To select by values, in the list, clear the (Select All) check box. This removes the
4
check marks from all the check boxes. Then, select only the values you want to
see, and click OK to see the results.

Moving and copying data

Copying duplicates the cell or range in another location, while also leaving the cell in its
original location.

Cutting removes a cell or range from its original location in the worksheet.
Pasting places the cell or range in another location.
To copy a cell or range, use buttons in the Clipboard group on the Home tab.
The copied data is placed on the Office Clipboard. The Office Clipboard (or
Clipboard) is a temporary storage area for up to 24 selections you copy or cut.
To move a cell or range, you use the Cut button, followed by the Paste button.

Inserting and Deleting Rows, Columns and Cells

To insert a row, click the row heading to select the row where you want the new row to
appear. Then, click the Insert button on the Home tab.

To insert a column, click the column heading to select the column where you want the new
column to appear. Then, click the Insert button.

To delete a row or column, click the appropriate row or column heading and then click the
Delete button on the Home tab.

Use the buttons in the Cells group on the Home tab to insert and delete cells.
Sort your data

Step Action

1 To quickly sort your data, do the following:

Select a range of data, such as A1:L5 (multiple rows and columns) or C1:C80 (a single
column). The range can include titles that you created to identify columns or rows.

2 Select a single cell in the column on which you want to sort.

3 Click to perform an ascending sort (A to Z or smallest number to largest).

4 Click to perform a descending sort (Z to A or largest number to smallest).

To sort by specific criteria, do the following:
Select a single cell anywhere in the range that you want to sort.

On the Data tab, in the Sort & Filter group, click Sort.

The Sort dialog box appears.

In the Sort by list, select the first column on which you want to sort.
In the Sort On list, select either Values, Cell Color, Font Color, or Cell Icon.

In the Order list, select the order that you want to apply to the sort operation —
alphabetically or numerically ascending or descending (that is, A to Z or Z to A for text
or lower to higher or higher to lower for numbers).
Lesson 4: Using Formulas and Functions

Overview
This is section discusses the how to construct formulas to perform addition, subtraction,
multiplication or division as well as Functions used in Excel like the AutoSum or AVG
(average).

After completing this lesson, you‘ll know how to:

Enter formulas using the keyboard
Enter formulas using Point mode
Apply the AVERAGE, MAX, and MIN functions
Verify a formula using Range Finder
Apply a theme to a workbook
Apply a date format to a cell or range
Add conditional formatting to cells

Formulas

Formulas helps you to calculate and analyze data on your worksheet. Formulas contain
operands and operators as illustrated below. By default, when a formula is created,
references to cells or ranges are usually based on their position relative to the cell that
contains the formula.

When you copy the formula, Excel will automatically paste the adjusted references in the
destination cells relative to the position of the formula. Before you begin, type in the data for
the Feb column, as shown below.

1. In a cell, type an equal sign (=) to start the formula.

2. Type a combination of numbers and operators; for example, 3+7.
3. Use the mouse to select other cells (inserting an operator between them). For
example, select B1 and then type a plus sign (+), select C1 and type +, and then select
D1.
4. Press ENTER when you finish typing to complete the formula.
 Constant value 2
Cell reference A1
Range reference A1:B2
Label Jan Sales
Range name Revenue
Function Sum(A1:B4)

Operators: Symbols
Addition +
Subtraction -
Multiplication *
Division /
Percent %
Exponential ^

The Excel syntax includes an equal sign (=) followed by the operands and the operators
such as

=2+3 =Sales / Months

= A1 - B6 =5 ^ 4
=3 * A5

The order of the elements in a formula determines the final result of the calculation.
Excel performs the operations from left to right according to the order of operator
precedence.

Operator precedence

Operator Description
: (colon) Reference operators
(single space)
, (comma)
– Negation (as in -1)
% Percent
^ Exponentiation
* and / Multiplication and division
+ and - Addition and subtraction
& Connects two strings of text
(concatenation)
= < > <= >= <> Comparison
For example:

= 2 + 3 * 2 equals to 8
Not 10 because Excel calculates multiplication before addition.
You can control the order of calculation by using parentheses to group operations that
should be performed first.
For example:
= (2 + 3) * 2
equals to 10

Entering functions

A basic function is a shortcut for a formula. Formulas and functions are a primary reason for
using Excel, and it is essential that you start learning how easy they are to master. Although
there are some subtle differences between a formula and a function, many
people use the words interchangeably.

A formula is an equation that

performs a calculation. You enter a formula in a cell at a location when some arithmetic is
required.

When you press Enter, the results are displayed in the cell. A function is a built-in Excel
formula. These built-in formulas cover many categories of commonly used mathematical,
statistical, financial, and scientific operations.

An Excel function has syntax, which defines the necessary parts of the formula and the
order of those parts. The syntax consists of an equal sign and the name of the function,
followed by parentheses. Inside the parentheses, you place arguments. An argument is
the information the function needs to complete its calculation, usually one or more values
or cell addresses. Many functions use a cell range as an argument, a group of cells with a
single address. A cell-range address includes the first cell, a colon, and the last cell.

The Components of a function include:

Cell reference - indicates a cell’s location and provides instructions for how cell data is
copied or used in calculations.
Relative - cell value changes as the formula is copied
Absolute - cell value remains static when copied to other locations
Mixed - combination of an absolute and a relative cell
Parentheses - control the Order of Operations
Conditions or criteria tell the function how to calculate the results and what data to use.
Other commonly used functions are shown in the following table.

Function Description Result

Name
MAX() Finds the largest number from the =MAX(20,25,15)
arguments Result: 25
MIN() Finds the smallest number from the =MIN(20,25,15)
arguments Result: 15
SUM() Adds the range of cells =SUM(A1:A35)
Result: 115
AVERAGE() Finds the average for the arguments =MIN(20,25,15)
Result: 15
COUNT() Counts number of cells that contains number =COUNT(1,4,B,3,20)
from the arguments Result: 4
COUNTA() Counts number of cells that are not empty =COUNTA(1,4,B,3,20)
from the arguments Result: 5

Some functions do not need an argument in the parenthesis.

Function Description Result

Name
Today() Returns current date =Today()
Result: 9/4/03
Now() Returns current date and time =Now()
Result: 9/4/03
12:20
Copy a Function

When a cell contains a function or a formula, the Fill handle acts as a copy tool. It copies the
formula across the dragged range, adjusting the cell references as needed.

The SUM function in cell B18, when copied to column C, should be =SUM(C4:C17). This
concept is known as relative reference. It means that, when copying a formula, Excel
knows to change it to reflect the row and/or column in which the copy is located.
The Average Function

You can use either your mouse or the keyboard to determine the Average of a range from a
worksheet. The method you‘re most comfort using is the best choice. Below are the
steps used to add the AVG function to a worksheet.

Step Action

1 Select the cell to contain the average.

2 Type =av in the cell to display the Formula AutoComplete list. Press the DOWN ARROW
key to highlight the required formula.

3 Double-click AVERAGE in the Formula AutoComplete list to select the function.

4 Select the range to be averaged to insert the range as the argument to the function.

5 Click the Enter box to compute the average of the numbers in the selected range and
display the result in the selected cell.
The MAX Function

Step Action

1 Select the cell to contain the maximum number.

2 Click the Insert Function box in the formula bar to display the Insert Function dialog
box.

3 Click MAX in the ‗Select a function‘ list to select it.

4 Click the OK button to display the Function arguments dialog box.

5 Type the range in the Number1 box to enter the first argument of the function.

6 Click the OK button to display the highest value in the chosen range in the selected cell
The MIN Function

Step Action

1 Select the cell to contain the lowest number.

2 Click the Sum button arrow on the Home tab to display the Sum button menu.

3 Click Min to display the MIN function in the formula bar and in the active cell.

4 Drag through the range of values of which you want to determine the lowest number

5 Click the Enter box to determine the lowest value in the range and display the result in
the formula bar and in the selected cell.
The MIN Function

Step Action

1 Select the cell to contain the average.

2 Type =av in the cell to display the Formula AutoComplete list. Press the DOWN ARROW
key to highlight the required formula.

3 Double-click AVERAGE in the Formula AutoComplete list to select the function.

4 Select the range to be averaged to insert the range as the argument to the function.

5 Click the Enter box to compute the average of the numbers in the selected range and
display the result in the selected cell.
ABSOLUTE VERSUS RELATIVE REFERENCE
You can use three types of cell references in Excel 2010 formulas: relative, absolute, and mixed. Using
the correct type of cell reference in formulas ensures that they work as expected when you copy them
to another location in the worksheet. Formulas and functions are at their most useful when using
references, so you need to understand them.

Relative reference is a referencing style in which, as a formula or function is dependent upon the cell
address, such that when copied and pasted to other cells, the cell references in the formula or function
change to reflect the function's new location. Relative reference is the default Excel’s setting. Excel is
dynamic when it comes to cell addresses. If you have a cell with a formula that references a different
cell's address and you copy the formula from the first cell to another cell, Excel updates the cell reference
inside the formula in relative reference setting. Try an example:

1. In cell B2, enter 100.

2. In cell C2, enter =B2*2.
3. Press Enter. Cell C2 now returns the value 200.
4. Select cell C2.
5. Press Ctrl+C or click the Copy button on the Home tab.
6. Click cell C3.
7. Press Ctrl+V or click the Paste button on the Home tab.
8. If you see a moving marquee around cell C2, press the Esc key.

Cell C3 should be the active cell, but if it is not, just click it once. Look at the Formula bar. The
contents of cell C3 are =B3*2, and not the =B2*2 that you copied.

What happened? Excel, in its wisdom, assumed that if a formula in cell C2 references the cell B2 — one
cell to the left — then the same formula put into cell C3 is supposed to reference cell B3 — also one cell
to the left. Relative references adjust when you copy a formula. When copying formulas in Excel, relative
addressing is usually what you want. That is why it is the default behavior.

Sometimes you do not want relative addressing but rather absolute addressing/reference. This involves
making a cell reference fixed to an absolute cell address so that it does not change when the formula is
copied. In an absolute cell reference, a dollar sign ($) precedes both the column letter and the row
number.

You can also have a mixed reference in which the column is absolute and the row is relative or vice versa.
A mixed cell reference is a combination of relative and absolute cell references. To create a mixed
reference, you use the dollar sign in front of just the column letter or row number.

Switch between relative, absolute, and mixed references

By default, a cell reference is relative. For example, when you refer to cell A2 from cell C2, you are
actually referring to a cell that is two columns to the left (C minus A), and in the same row (2). A formula
that contains a relative cell reference changes as you copy it from one cell to another. As an example, if
you copy the formula =A2+B2 from cell C2 to D2, the formula in D2 adjusts downward by one row and
becomes =A3+B3. If you want to maintain the original cell reference in this example when you copy it,
you make the cell reference absolute by preceding the columns (A and B) and row (2) with a dollar sign
($). Then, when you copy the formula (=$A$2+$B$2) from C2 to D2, the formula stays exactly the same.

In less frequent cases, you may want to make a cell reference "mixed" by preceding either the column
or the row value with a dollar sign to "lock" either the column or the row (for example, $A2 or B$3). To
change the type of cell reference:
 1. Select the cell that contains the formula.
2. In the formula bar, select the reference that you want to change.
3. Press F4 to switch between the reference types.

The following table summarizes how a reference type updates if a formula containing the reference is
copied two cells down and two cells to the right.
For a formula being
If the reference is: It changes to:
copied:
$A$1 (absolute column and absolute
$A$1 (the reference is absolute)
row)
A$1 (relative column and absolute row) C$1 (the reference is mixed)
$A1 (absolute column and relative row) $A3 (the reference is mixed)
A1 (relative column and relative row) C3 (the reference is relative)
Cell Reference Types
Reference Type Formula What Happens After Copying the Formula
Both the column letter A and the row number 1 can
Relative =A1
change.
The column letter A and the row number 1 does not
Absolute =$A$1
change.
The column letter A does not change. The row number 1
Mixed =$A1
can change.
The column letter A can change. The row number 1 does
Mixed =A$1
not change.

Demonstration will be given during lectures

MICROSOFT EXCEL AS A FINANCIAL CALCULATOR

Excel (and other spreadsheet programs) is the greatest financial calculator ever made. There is more of a
learning curve than a regular financial calculator, but it is much more powerful. Under this section,
students will be exposed to introductory aspects of some selected financial applications of excel spread
sheet. These include:

What-If Analysis, Amortization Schedule and Linear Programming.

INTRODUCTION TO WHAT-IF ANALYSIS

The real power in Excel lies in its ability to perform multiple mathematical calculations for you. One
of the tools in Excel that you can use to perform these calculations is a Data tool called what-if
analysis. What-if analysis allows you to see the effect different values have in formulas. Have you
ever thought, "What interest rate do I need to qualify for to have a car payment of $400 on the car
I want?" This question can be answered using what-if analysis. By using what-if analysis tools in
Microsoft Office Excel, you can use several different sets of values in one or more formulas to
explore all the various results.

For example, you can do what-if analysis to build two budgets that each assumes a certain level of
revenue. Or, you can specify a result that you want a formula to produce, and then determine what
sets of values will produce that result. Excel provides several different tools to help you perform the
type of analysis that fits your needs.

Overview
What-if analysis is the process of changing the values in cells to see how those changes will affect
the outcome of formulas on the worksheet.

Three kinds of what-if analysis tools come with Excel: scenarios, data tables, and Goal Seek.
Scenarios and data tables take sets of input values and determine possible results. A data table
works only with one or two variables, but it can accept many different values for those variables. A
scenario can have multiple variables, but it can accommodate only up to 32 values. Goal Seek works
differently from scenarios and data tables in that it takes a result and determines possible input
values that produce that result.

In addition to these three tools, you can install add-ins that help you perform what-if analysis, such
as the Solver add-in. For the purpose of this class, Scenario analysis and data table will not be
covered.

GOAL SEEK

The Goal Seek feature in Excel 2010 is a what-if analysis tool that enables you to find the input values
needed to achieve a goal or objective.

To use Goal Seek, you select the cell containing the formula that will return the result you are
seeking and then indicate the target value you want the formula to return and the location of the
input value that Excel can change to reach the target.
The steps below follow a specific example for using Goal Seek to help you better understand how
to use this feature.

Use Goal Seek to find out how to get a desired result

If you know the result that you want from a formula, but you are not sure what input value the
formula requires to get that result, you can use the Goal Seek feature.

Note Goal Seek works with only one variable input value. If you want to determine more than one
input value, for example, the loan amount and the monthly payment amount for a loan, you should
instead use the Solver add-in.

To get a better understanding of what the goal seek command actually does, create a spreadsheet
that looks similar to this:

Step 1 – Set up a scenario

In cell A1, we have the text “Already Know,” used as a label for the value within our formula that we
are certain of. In this example, that value is 25, as seen in cell B1.

In cell A2, we have the text “Uncertain Value,” used as a label for the input value we want to
determine. In the current equation, we have a value of 75, as seen in cell B2.

In cell A3, we have the text “Desired Result,” used as a label for the expected outcome of our
equation.

Step 2 – Insert a formula

Next, select cell B3 and enter =SUM(B1+B2) into the formula bar, and press Enter. A value of 100
should appear in cell B3, the sum of cells B1 and B2. In other words, 25+75=100.
Step 3 – Select the Goal Seek command

Next, navigate up to the Data tab in the ribbon menu. At the far right, there should be a group called
Data Tools. Under the Data Validation and Consolidate options, you will find a drop-down menu for
What-If Analysis. Select that, and from the menu, select Goal Seek.

Step 4 – Input the desired values

The goal seek function requires input for three options.

Set cell: Here, you need to input the name of the cell where the formula is located. For our example,
that is cell B3, which holds our formula =SUM(B1+B2).

To value: Here, you need to input the real desired value of our new equation, which the goal seek
function will create. We’ll set it to 200. This means we want the sum of cells B1 and B2 to equal 200.
However, we can only do that…

By changing cell: This one is very straightforward. The sum of cells B1 and B2 can only equal 200 by
changing the value of one of our cells. In our example, we want to change cell B2, so we enter in B2.
Then, click OK!

Step 5 – Success!
Once we hit OK, the computer finds that the only way to make the sum of cell B1 and cell B2 equal
200, when B1 remains 25 and B2 is an unknown value, is to change B2 to 175.

It is basic math. It is something you could solve in your head in a second. However, it can be applied
to much more complicated mathematical scenarios and make for a more beneficial outcome. This
example merely demonstrated its basic function.

Potential Sales Example

For a more applicable example, let us say you run an online store where you sell hand-crafted
necklaces at $18 each. You sell 35 of these a month for a monthly profit of $630. However, materials
are getting more expensive, and after doing some calculations, you decide it would be most
convenient if you were to make $900 a month. But how much do you need to raise the price of your
product to meet that goal?

Let’s create a basic spreadsheet:

In our first table, we list our Current Sales information. In cell B2 we have 35, for number of
necklaces sold per month, and in cell B3 we have $18.00, for the unit price per necklace. In cell B4,
we enter the formula =E2*E3 to multiply the number of necklaces sold by the unit price, hit Enter,
and come out with a profit of $630.00.
In our second table, we have the same information, but because this is our Desired Sales table, we
will be changing some things up with the goal seek function.

Set cell: We set E4, because that is the cell where we want our newly calculated profit to go.

To value: We want the value of our new profit to be $900.00, so input 900 for this one.

By changing cell: We want to change the price of our product, not the amount of products sold, so
input E3.

Goal seek will then change the value in cell E3 – where the price of our product is – into one that
would, when multiplied by 35, equal 900.

The goal seek function calculates that we will need to sell each necklace at $25.71 to make $900 a
month. If we do the actual calculation here, we see that 25.71 x 35 = 899.85, while 26 x 35 = 910,
meaning goal seek will round as close to the number as possible.
If we owned a store, we would probably decide to round the number down ourselves, to 25 or 26,
depending on circumstances. Nevertheless, goal seek has done its job.

What if the prices of materials have not changed, and we merely want to produce more items each
month to turn out a bigger profit? We could use goal seek to figure this out just by inputting E2,
instead of E3, into the “by changing cell” box.

At the end of the calculation, the what-if analysis tool will determine we need to sell 50 necklaces
per month in order to make $900, exactly. TRY IT BY YOURSELF!

Example 2

A car manufacturer sold 500 units of cars for a price of ₦5 million (@ 5% discount) each. His revenue
for the period amounted to ₦2,250,000,000, which was short of his targeted revenue of ₦3billions.

Required: Use goal seek to find out:

1. The price at which he need to sell each car to attain his targeted revenue while maintaining
his current output and the 5% price discount
2. The total output he need to produce and sell in order to attain his targeted revenue while
maintaining his current price and the 5% price discount
3. What will be the price in (1) if there is no price discount?

Let’s do it!

1. The price at which he need to sell each car to attain his targeted revenue while maintaining
his current output and the 5% price discount

Type in cell B6: =B3*((1-B5)*B4)

Then Press ENTER. Cell B6 will now be reflecting ₦2,250,000,000. Your result will looks like in
the table below
Next is for you to go to the Ribbon, under DATA tab and click the drop down menu on WHAT-IF
ANALYSIS button

Among the WHAT-IF Analysis tools, Select GOAL SEEK

In the pop-up window, fill in the details as shown below

Here, you are asking the software to set the total revenue (in cell B6) to N3 billion, by changing the
price (in cell B4).

Press ENTER on your keyboard to get the result as shown below:

As you can observed, Cell B^ has changed from ₦2,225,000,000 to value of ₦3,000,000,000. Also
cell B4 has changed from ₦5,000,000 to N6,666,667.

The answer to question 1 therefore is that, the car manufacturer needs to sell each unit of the 500
cars at the price of ₦6,666,667 in order to attain his targeted revenue of ₦3,000,000,000.

2. The total output he need to produce and sell in order to attain his targeted revenue while
maintaining his current price and the 5% price discount

To find the answer to question 2 above, the formula entered in cell B6 will remain the same. So also
the TARGET cell. However, the CHANGING cell need to change at the GOAL SEEK stage.

When solving for question 1, the TARGET cell was cell B6 because the target was revenue increase
by changing the price (in cell B4). The same here, the target has not changed (evenue increase to
3Billion). However, it should be attained by changing the output/sales volume this time around (in
cell B3). Thus, our entries will be as shown below:

As you can observe above, the changing cell is now cell B4 which contains the sales output.
From the result above, we got the answer to question 2. Thus, to attain a sales revenue of 3billion
(without changing the price or the price discount), the manufacturer need to produce and sell about
666.67 (approximately 667) units of cars.

3. What will be the price in (1) if there is no price discount?

This question is simply asking us to redo question 1 while ignoring the discount. This
therefore means that we should re-adjust the formula we entered in cell B6 by removing the
part which has to do with the discount, before we re-run the GOAL SEEK. Thus:

The part that has to do with factoring in the discount in the formula is in the parentheses as
highlighted above. Removing it, we have:
As you can see, it is just a matter of multiplying the price by the units of cars sold. The value has
increased (since there is no discount this time around. We we can re-run our GOAL SEEK as we did
in question 1 above.

And after pressing OK / ENTER, we will have:

As you can see above, N6,000,000 is the price required to increase to in order to meet up the
revenue target when discount is not offered.

Example 3

You need a loan to buy a new car. You know how much money you want to borrow, how long
of a period of time you want to take to pay off the loan (the term), and what payment you
can afford to make each month. But what you need to know is what interest rate you need
to qualify for to make the payment $400 per month. In the image below, you can see that if
you didn’t have interest and just divided this $20,000 into 60 monthly payments, you would
pay $333.33 per month. The what-if analysis tool will allow you to easily calculate the interest
rate.

TRY THE ABOVE ON YOUR OWN

AMORTIZATION SCHEDULE IN EXCEL SPREAD SHEET
An amortization schedule shows the interest applied to a fixed interest loan and how the principal is reduced
by payments. It also shows the detailed schedule of all payments so you can see how much is going toward
principal and how much is being paid toward interest charges. What's more, an amortization schedule is
easily created on Microsoft Excel. Start at Step 1 to make your own schedule at home without wasting money
by hiring someone else to make it!

Consider a loan collected for a period of 3 years at 12.5% interest rate per annum, and a monthly repayment
arrangement.
STEPS:
1. Launch Microsoft Excel and open a new spreadsheet.

2. Create labels in cells A1 down through A4 as follows: Loan Amount, Interest Rate and Duration/Year.

3. Enter the Loan Amount in cell B2, Interest (in percentage) in cell B3 and the Duration/Year in cell B4

4. Label the columns from cell A7 across through E7 as follows: Period, Payment, Principal, Interest and
Balance, respectively.
5. Calculate your instalment payment in cell B8 by typing " =PMT($B$3/12,$B$4*12,$B$2,0)" into the
formula bar without the quotation marks and pressing the Enter key.
6. Calculate the PRINCIPAL payment in cell C8 by typing “=PPMT($B$3/12,A8,$B$4*12,$B$2)” into the
formula bar without the quotation marks and pressing the Enter key
7. Calculate the INTEREST payment in cell D8 by typing “=IPMT($B$3/12,A8,$B$4*12,$B$2)” into the
formula bar without the quotation marks and pressing the Enter key
8. Calculate the unpaid BALANCE in cell E8 by typing “=(B2+C8)” into the formula bar without the
quotation marks and pressing the Enter key

NOTE:
•The dollar signs in the formula are absolute references to make sure the formula will always look to those
specific cells, even if it is copied elsewhere into the worksheet.
•The loan interest rate must be divided by 12, since it is an annual rate that is calculated monthly.
•For example, if your loan is for =N=150,000 at 6 percent interest for 30 years (360 months), your loan
payment will calculate out to =N=899.33.
9. Now, number the Periods up to 36 (1,2,3…36) from row A8 to row A43
10. Drag cell B8, C8 and D8 respectively down to cell B43, C43 and D43.
11. Calculate a new unpaid BALANCE in cell E9 by typing “=(E8+C9)” into the formula bar without the
quotation marks and pressing the Enter key

12. Drag cell E9 down to cell E43, like you did for the other cells (but for this one it is one cell downward)
USING EXCEL TO SOLVE LINEAR PROGRAMMING PROBLEMS

Linear programming (LP) is one of the most widely applied Operational Research techniques and owes its
popularity principally to George Danzig's simplex method (Danzig 1963) and the revolution in computing. It
is a very powerful technique for solving allocation problems and has become a standard tool for many
businesses and organisations. Although Danzig's simplex method allows solutions to be generated by hand,
the iterative nature of producing solutions is so tedious that had the computer never been invented then
linear programming would have remained an interesting academic idea, relegated to the mathematics
classroom. Fortunately, computers were invented and as they have become so powerful for so little cost,
linear programming has become possibly one of the most widespread uses for a personal PC.

There are of course numerous software packages which are dedicated to solving linear programs (and other
types of mathematical program), of which possibly LINDO, GAMS and XPRESS-MP are the most popular. All
these packages tend to be DOS based and are intended for a specialist market which requires tools dedicated
to solving LPs. In recent years, however, several standard business packages, such as spreadsheets, have
started to include an LP solving option, and Microsoft Excel is no exception. The inclusion of an LP solving
capability into applications such as Excel is attractive for at least two reasons. Firstly, Excel is perhaps the
most popular spreadsheet used both in business and in universities and as such is very accessible. Second to
this, the spreadsheet offers very convenient data entry and editing features which allows the student to gain
a greater understanding of how to construct linear programs.

In nutshell, technology can be used to solve a system of equations once the constraints and objective function
have been defined. Excel has an add-in called the Solver which can be used to solve systems of equations or
inequalities. To use Excel to solve LP problems the Solver add-in must be included. Typically this feature is
not installed by default when Excel is first setup on your hard disk. To add this facility to your Tools menu you
need to carry out the following steps (once-only):
 1. Select the menu option Tools | Add-Ins (this will take a few moments to load the necessary file).
2. From the dialogue box presented check the box for Solver Add-In.
3. On clicking OK, you will then be able to access the Solver option from the new menu option Tools |
Solver (which appears below Tools | Scenarios ...or under DATA group on the Ribbon)

Consider this problem:

Example: A corporation plans on building a maximum of 11 new stores in a large city. They will build these
stores in one of three sizes for each location – a convenience store (open 24 hours), standard
store, and an expanded services store. The convenience store requires $4.125 million to build
and 30 employees to operate. The standard store requires $8.25 million to build and 15
employees to operate. The expanded-services store requires $12.375 million to build and 45
employees to operate. The corporation can dedicate $82.5 million in construction capital, and
300 employees to staff the stores. On the average, the convenience store nets $1.2 million
annually, the standard store nets $2 million annually, and the expanded services store nets
$2.6 million annually. How many of each should they build to maximize revenue?

Assign the variables:

x1 = number of convenience stores x2 = number of
standard stores

x3 = number of expanded services stores

Write the constraints:

a. x1 + x2 + x3 ≤ 11
b. 4.125 x1 + 8.25x2 + 12.375x3 ≤ 82.5
c. 30x1 + 15x2 + 45x3 ≤ 300
x1 ≥ 0, x2 ≥ 0, and x3 ≥ 0

Write the objective function: N(x1, x2, x3 ) = 1.2x1 + 2x2 + 2.6x3

(in millions)

We first need to open Excel and enter the data.

There are two methods – one uses tables within the worksheet while the other uses only the constraints.
The second method is preferred when we know the constraints since it is much faster!!!
Method One: Using Tables

Type in variable assignments at the

top of the spreadsheet.

Assign decision variable cells.

Decision variable cells:
D6, F6, and H6

Construct table from data in

problem. How you set up the table
is a matter of personal
preference.
Not in table: the constraint which
shows the sum is less than or equal
to eleven.
Formulas in cells:
Cell Formula
constraint a D15 = D6 + F6 + H6
constraint b D16 = 4.125*D6 + 8.25*F6 + 12.375*H6
constraint c D17 =30* D6 + 15*F6 + 45*H6
Maximize D19 =1.2* D6 + 2*F6 + 2.6*H6

Now that the table is set up, we can access the solver. Click on Tools. If you do not see Solver then click on
Add-Ins and select Solver. Now click on Tools again and select Solver.

Target cell: Maximize cell. To enter it, just click on that cell.

Equal to Max
Changing Cells: Decision variable cells D6, F6, H6.

Subject to the constraints: Click on Add. Click on Cell Reference and then click in D15, then click on Constraint
and then click in F15. Be sure the test listed between them is <=.

Now click on Options

Make sure Assume Linear Model and Assume Non-

Negative boxes are checked, then click OK.

Back at the Solver, click Solve. It should yield the

solution. Click on Keep solution.

The solutions are as shown: two convenience stores

nine standard stores, and no expanded-services
stores.

Method Two: Using Constraints

Using a table to set up the problem makes the organization of data organized, but it has one problem. All of
this is time consuming! We can get the same results by just typing in the constraints! The alternate format
looks like this…
The first of the spreadsheet is done the same – typing in the variable assignments and assigning decision
variable cells. Next, we type the constraints which will be used as a guide to type in the formulas in F9, F10,
F11. They are the same formulas as in the earlier spreadsheet – with different cell references. Finally, we
type in the maximize formula for reference and its formula in F13. We are now ready to access the Solver
like we did before. We should get the same results…

EXAMPLE 2:
Let x1 and x2 be amounts in N000’s to be used in Project I & II. Funds available are N500,000 from retained
earnings and N700,000 from issue of new ordinary shares. Retained earnings may be used in the ratio of 3:4
for Projects I & II while the new issue of shares may be used in the ration of 5:2.
Project I is expected to earn a Net Profit of N100 for every N1,000 employed in the project while Project II is
expected to earn a Net Profit of N70 for every N1,000 employed.
Find the optimal combination of Projects I & II that will maximise the profit of the firm.
SOLUTION WILL BE ILLUSTRATED IN THE CLASS