Designing & Creating a

Template Worksheet

DESIGNING A
TEMPLATE WORKSHEET
When designing a template worksheet, you will probably
want to divide it into logical segments or modules, called
sections.
For example, in developing a financial forecast, you might
divide a worksheet into the following sections:
Report section: Often called the main section of the
worksheet, this is the main body of the worksheet that you
will print out in the form of a report.
Data input section: This section is used for entering data or
changing key assumptions in a worksheet. By making it a
separate section, you can enter data and/or change key
assumptions and then turn to the report section of the
worksheet to see the effects of the changes.

DESIGNING A
TEMPLATE WORKSHEET
One common problem with dividing a worksheet into
sections is that you cannot see the entire worksheet in the
workbook window at one time.
This can lead to inadvertent errors when you change
column widths or insert or delete columns or rows.
For example, if some of the rows in the report section of the
worksheet are common to the data input section, deleting a
row in the main body of the worksheet might inadvertently
cause you to delete a row in the data input section.
The best way to prevent this type of error is to make sure
that none of the rows and columns in one section of the
worksheet is common to another section.

Information for Constructing

the Sample Worksheet

Sales Estimated to be $250,000 in the year 2010, and expected to

increase by 12 percent per year for each year thereafter.
Cost of Sales Estimated to be 40 percent of sales.
Gross Margin Computed as sales minus cost of sales.
Selling Expenses Estimated to be 23 percent of sales.
Gen and Admn Expenses Estimated to be the greater of $40,000 or 14
percent of sales, whichever is the greater.
Other Expenses Estimated to be $20,000 in the year 2010, and expected to
increase by $1,500 per year for each year thereafter.
Total Expenses The sum of selling expenses, general and administrative
expenses, and other expenses
Income from Operations Computed as gross margin minus total expenses.
Prov for Income Taxes - Estimated to be 20 percent of income from
operations.
Net Income Computed as income from operations less estimated income
taxes

A Worksheet's Default Settings

Gridlines display around cells.
Each column in the worksheet has a width of 8.11. This number
represents the number of characters that can be displayed in a cell
using the standard font and font size.
Cells display numeric values in the General format:
Integer values of up to 11 digits (e.g., 389) display in cells without
the decimal point or decimal places.
Decimal values of up to 10 digits plus decimal point (3.898989898)
display in cells.
Cells display no more than 11 digits. Decimal places are truncated
(i.e., dropped) if there are more than 11 digits in a cell, but 11 or
fewer digits to the left of the decimal point. Integer values and
decimal values display in the scientific notation if (1) the digits to
the left of the decimal point are longer than the width of the cell or
(2) there are more than 11 digits to the left of the decimal point.
The default screen font is Calibri.
The default font size is 11 points.

Most of Excels Default Settings

Can Be Changed for
All workbooks and worksheets created in
subsequent Excel sessions
All worksheets in a workbook
A worksheet within a workbook
Selected cells in a worksheet

Changing Excels
Default Settings
Range of cells: Click on the Format button in the
Cells group of the Home tabs Ribbon and then
click on the Format Cells command in the
submenu.
Display or suppress gridlines: Check or remove
the check in the Gridlines View box of the Sheet
Options group in the Page Layout tabs Ribbon.

Saving a Workbook
Save Command
Press Ctrl+S
Choose the Save command in the File menu.
Save As Command
Save as command in the Office button menu.
Save a newly created workbook (same as Save
command).
Save an existing workbook to a different filename, to a
different file folder (i.e., a different directory or
subdirectory), or to a different disk drive.
Save a workbook under a different file format.

Entering Text in the

Sample Worksheet
Cost of Sales
Gross Margin
Operating Expenses:
Selling Expenses
Gen & Admn Expenses
Other Expenses
Total Expenses
Income from Operations
Prov for Income Taxes
Net Income

Aspects of Entering Text

Indenting Text in Cells
Changing Numbers to Text
Aligning Text in Cells
Changing the Width of a Column to Accommodate
Row Titles

Forecast without Rounding

Forecast with Rounding

Avoiding Rounding Errors When

Displaying Values with a Fixed
Number of Decimal Places
Use the ROUND function to round the number
stored in a cell to the number of decimal places
displayed in the cell.
Use the INT function to round the number down to
the nearest integer.

Sales
Enter 250000 in cell B3, which contains sales for
the year 2010.
Enter =Round(B3*(1+.12),0) in cell C3, which
contains sales for 2011.
Copy the formula in cell C3 to cells D3 through F3,
which contain sales for years 2012 to 2014.

Cost of Sales
Enter =Round(B3*.4,0) In cell B4, which contains
Cost of Sales for the year 2010.
Copy the formula in cell B4 to cells C4 through F4,
which contain Cost of Sales for years 2011 to
2014.

Gross Margin
Enter the formula =B3-B4 in cells B5, which
contains Gross Margin for the year 2010.
Because this formula does not include
multiplication or division, it is not necessary to round
it.
Copy the formula in cell B5 to cells C5 through F5,
which contain Gross Margin for years 2011 to 2014.

Selling Expenses
Enter the formula =ROUND(B3*.23,0) in cell B7,
which contains Selling Expenses for the year 2010.
Copy the formula in cell B7 to cells C7 through F7,
which contain Selling Expenses for years 2011 to
2014.

General & Admn Expenses

General and administrative expenses for years 2010
through 2014 are estimated to be the greater of
$40,000 or 14 percent of sales for the same years.
Since it could be either value for any given year,
depending on the value of sales for that particular year,
and since the value of sales for a particular year could
change, you must use either the IF or the MAX
function.
The IF function allows you to conduct a logical test (for
example, whether 14 percent of sales is greater than
$40,000) and select one of two values (14 percent of
sales or $40,000), depending on whether the result of a
logical test is true or false.

General & Admn Expenses

The MAX function selects the larger (largest) of two (or
more) values. For example, if you entered
MAX(B3*.14, 40000), the MAX function would return
the larger of the two values and display it in the cell.
(Conversely, the MIN function would return the smaller
of two or more values.)
Since the IF function is more powerful and more
versatile than the MAX function, you will use it to
compute the value of Gen & Admn Expenses in the
sample worksheet. When used in a worksheet, the
syntax of the IF function is as follows:
IF(logical_test, value_if_true, value_if_false)

General & Admn Expenses

As you can see from its syntax, the IF function has three
arguments:
Argument
Description
logical_test A logical test (i.e., a condition), which
must be value or expression that can be
evaluated to TRUE or FALSE.
value_if_true The value returned by the IF function if the
logical test is true. If the logical test is
TRUE and this argument is omitted, then
TRUE is returned.
value_if_false The value returned by the IF function if the
condition is false. If the logical test is
FALSE and this argument is omitted, then
FALSE is returned.

Logical Test Argument

When a logical_test argument is entered in the form of an
expression, it generally consists of a value, a relational
operator, and another value.
For example, a value can be a numeric constant (e.g.,
40000), a formula (e.g., B3*.14), or even another function.
You can include any of the following relational operators in a
logical_test argument:
RELATIONAL OPERATOR DESCRIPTION
=
Equal to
<>
Not equal to
<
Less than
<=
Less than or equal to
>
Greater than
>=
Greater than or equal to

Logical Tests
Excel allows you to include up to 30 logical tests in an IF
function in order to provide greater versatility in creating
complex logical conditions. However, if you want to
incorporate multiple logical tests in an IF function, you must
enter the logical tests with either the AND or the OR logical
functions.
AND(test1, test2,...,test30) All logical tests must be true in
order for the logical test in the IF function to be true.
Otherwise, the logical test is false. For example, the AND
function could be used with the IF function as follows:
IF(AND(test1, test2, test3),value_if_true,value_if_false)
If all three logical tests are true, then the value_if_true is
returned by the IF function. Otherwise, the value_if_false is
returned.

Logical Tests
OR(test1, test2,...,test30) Any of the tests must be true in
order for the logical test in the IF function to be true.
Otherwise, the logical test is false. For example, the OR
function could be used with the IF function as follows:
IF(OR(test1, test2, test3),value_if_true,value_if_false)
If one or more of the three logical tests are true, then the
value_if_true is returned by the IF function. Otherwise, the
value_if_false is returned.

NOT Logical Function

You can also include the NOT logical function in
an IF function in order to reverse the result of a
logical test.
For example, the following IF function would return
the value_if_true when the logical_test is false and
the value_if_false when the logical_test is true.
IF(NOT(logical_test, value_if_true,value_if_false)

Entering the IF Function for

General & Admn Expenses
Normally, you would enter the IF function in cell B8
as follows:
=IF(B3*.14>40000, B3*.14, 40000)
Because you will change the number format of cell
B8 to display zero (0) decimal places, however, and
because the value_if_true argument contains
multiplication, you should round the IF function to 0
decimal places.

Entering the IF Function for

General & Admn Expenses
Accordingly, select cell B8, which represents
general and administrative expenses for the year
2010, and enter the following:
=ROUND(IF(B3*.14>40000, B3*.14, 40000),0)
Copy the functions and formulas in cell B8 to cells
C8 through F8, which contain General & Admn
Expenses for the years 2011 to 2014.

Relative vs. Absolute Cell Addresses

in Formulas and Functions
Relative Cell Addresses:
Relative cell addresses in formulas or functions
change as the formula or function is copied to
other cells.
Absolute Cell Addresses:
Absolute cell addresses in formulas or functions
do not change as the formula or function is
copied to other cells.

Other Expenses
Enter 20000 in cell B9, which contains Other
Expenses for the year 2010.
Enter the formula =B9+1500 in cell C9, which
contains Other Expenses for the year 2011.
Because this formula does not include
multiplication or division, it is not necessary to
round it.
Copy the formula in cell C9 to cells D9 through F9,
which contain Other Expenses for the years 2012
to 2014.

Total Expenses
Enter the function =SUM(B7:B9) in cell B10, which
contains Total Expenses for the year 2010.
Because this function does not include
multiplication or division, it is not necessary to
round it.
Copy the function in cell B10 to cells C10 through
F10, which contain Total Expenses for years 2011
to 2014.

Income from Operations

Enter the formula =B5-B10 in cell B11, which
contains Income from Operations for the year
2010.
Because this formula does not include
multiplication or division, it is not necessary to
round it.
Copy the formula in cell B11 to cells C11 through
F11, which contain Income from Operations for the
years 2011 to 2014.

Provision for Income Taxes

Enter the formula =ROUND(B11*.2,0) in cell B12,
which contains the Provision for Income Taxes.
Copy the formula in cell B12 to cells C12 through
F12, which contains the Provision for Income
Taxes for years 2011 to 2014.

Net Income
Enter the formula =B11-B12 in cell B13, which
contains Net Income for the year 2010.
Because this formula does not include
multiplication or division, it is not necessary to
round it.
Copy the formula in cell B13 to cells C13 through
F13, which contain Net Income for the years 2011
to 2014.

Values in the Total Column

Cells G3 through G5 and G7 through G13
represent five-year totals of the annual forecasted
values.
Enter the function =SUM(B3:F3) in cell G3.
Because this function does not include
multiplication or division, it is not necessary to
round it.
Copy the function in cell G3 to cells G4 to G5 and
G7 to G13.

The Completed Forecast

Template in Chapter 3