1.

Edition

Published in Austria by Naesby Publishing

Klosterneuburg, Niederösterreich
2019

Publishing House : Naesby Publishing

Owner: Hanah Naesby
Reichergasse 48
A-3400 Klosterneuburg

Website & Shop : naesbypublishing.com

Contact: naesbypublishing@gmail.com

Alle Rechte der Verbreitung, auch durch Funk, Fernsehen, Internet und sonstige
Kommunikationsmittel, fotomechanische oder vertonte Wiedergabe sowie des
auszugsweisen Nachdrucks vorbehalten.
 Excel © for Finance
Introduction
Gone are the days when you had to sit in the office all day with a calculator,
going through your accounts trying to figure out what’s not adding up.
Financial records require accuracy, especially in this day and age. Otherwise,
one day, when you are seated comfortably in your office enjoying a hot cup of
coffee, the government might knock on your door and audit the numbers out of
your books.
Yeah, the odds of that ever happening to low-level firms is one in a million…
but how can you keep track of your profits… or losses (in most startup
companies)?
This brings us to the main focus of this E-book; Excel. In this book, we are
going to explore everything you need to know about Excel and how you are
going to use the software to manage your finances.
Some of the topics include:
• Introduction to Excel
• Excel Basics
• Excel Formulas
• Creating Excel Formulas with built-in functions
• Extra Excel features
• Document preparation and Printing

What You Need (Prerequisites)

• A PC running on Windows (XP-Later), Mac OS or o A tablet or
smartphone running on any Operating System that supports the
recommended browser for online operations; Chrome.

• DOWNLOAD THE PRACTICE WORKBOO K HERE o r type

in this link : http://tiny.cc/4lrffz

NOTE: For Microsoft Office 2003-2010 users, you have the option of
choosing the individual packages you want to install rather than
installing the whole MS office bundle.
For MS Office 2013-later, or more specifically to the time this E-book
was written, you will need to install the whole MS Office bundle.
For a smooth experience, you need a PC with 256MB-1GB of RAM for
the Microsoft Office 2003-2010 package or 2GB-4GB of RAM for the
MS Office 2013-later packages. Excel online just requires a stable
browser.

Table of Contents
Introduction
What You Need (Prerequisites)
1. Introduction to Excel
1.1. What is MS Excel?
1.2. Installing MS Excel
Windows XP - Windows 7
1.2.1. Windows 8 - Later
1.2.2. macOS
2. Accessing MS Excel on Your Computer
Windows 8-10 (Office 2013-later)
All the Operating systems (including all the Office bundles)
3. Creating a New Workbook
4. Excel User Interface
4.1. Application Window
4.1.1. The quick access toolbar
4.1.2. Ribbon
4.2. The Worksheet Views and Zoom Slider
5. Getting Started with The Workbook
5.1. The Worksheet
 5.2. Pinning the Workbook
5.3. Compatibility mode
5.4. Saving and Sharing Workbooks
6. Cells
6.1. Cell Content
6.1.1. Text
6.1.2. Formatting attributes
6.1.3. Formulas & Functions
6.2. Inserting Content into Cells
6.3. Deleting Cells
6.4. Dragging & Dropping Cells
6.5. Using the Fill Handle
6.6. Find and Replace
6.7. Formatting Cells
6.7.1. Changing fonts
6.7.2. Cell Styles
6.8. Merging Cells
7. Formulas and Functions
7.1. Simple Formulas
7.2. Complex Formulas
7.3. Automatic Formula Cell Fill
7.4. Functions
8. Cash Flow Statements
9. Advanced Charts
Creating Advanced Charts

1 . Introduction to Excel
1.1 . What is MS Excel?
Excel is simply one of the most advanced spreadsheets that you can use for
calculation and also offers other features such as graphing tools, pivot tables,
and Visual Studio Macro Programming.
As you may well know, it is not the only spreadsheet out there. We also have
other spreadsheets such as Google Sheets, which is in fact, free to use online.
However, there are limitations you should expect from these other
spreadsheets, limitations you do not have to worry about while using Excel.

1.2 . Installing MS Excel

Windows XP - Windows 7
For Windows XP-Windows 7, you can install MS Excel 2003-2013 using the
installation discs provided by Microsoft. Click on the setup file and follow the
prompts. You may have to choose the packages you want to install in some of
the MS Office DVDs as mentioned earlier.

1.2.1 . Windows 8 - Later

For Windows 8 to later, you can use the recommended MS office Bundles,
which start from MS Office 2016- later. These can be downloaded from the
Microsoft servers. The process of installing these packages is the same as the
earlier ones; you just run the setup file as an administrator and you are good to
go.
NOTE : Some of the earlier MS Office Bundles and Windows Operating
Systems have been removed from the servers as they are no
longer supported by Microsoft. You can get them from other
sites, but it is advisable to work with the recommended software.

1.2.2 . macOS
You can download the disc image for MS Office on macOS through the
Microsoft site. They offer a ‘.dmg’ file that you can run to install the software.
2 . Accessing MS Excel on Your
Computer
Windows 8-10 (Office 2013-later)
1. Press the Windows logo key
2. Scroll down the list of apps to group E and look for Excel
3. Click to run

All the Operating systems (including all the

Office bundles)
1. Click on the Windows logo button
2. Type ‘Excel’ to search for the software then click to run

3 . Creating a New Workbook

If you successfully managed to start MS Excel without any issues, you are now
ready to create a new worksheet. The software is highly stable, especially on
the Windows operating system, hence you should be able to start it up without
errors.
However, if you faced some bugs or some annoying message box kept popping
up, you can easily find troubleshooting tips on the internet by searching the
error displayed on the message box.
Since this article was written after most of the previous Office Bundles and
Windows Operating System versions were discontinued, we are going to focus
on Windows 10 and MS Office 2013 - ~.
To create a new spreadsheet, click on ‘ blank workbook’ on the welcome page. If
the program automatically opens a worksheet for whatever reason (rarely
happens), click on ‘file’ at the top left of the window.
If you want to work on a file that already exists, click on open> browse then
select the file in the location it is stored. You can easily find a fil e you had
already opened earlier by clicking ‘Open Other Workbooks’ on the bottom right
pane.
4 . Excel User Interface
After opening MS Excel, you will be taken to two new windows;
• Application windows – The outer window
• Workbook windows – The inner window that is going to be your new
workspace.
Let’s have an in-depth look at these windows so that you can familiarize
yourself with the interface:

4.1 . Application Window

This window provides space for worksheet and workbook elements. Here you
are going to access features that are going to act as shortcuts to the excel
functions, namely;

4.1.1 . The quick access toolbar

The quick access toolbar permits you to access common commands. It includes;
save, undo and repeat command by default. You can also add some command
that you may wish to use by following these simple steps
a) Click on the drop-down arrow in the right of the quick access toolbar.
b) Select on the command you want to add on the drop-down arrow.
Also, you can choose more commands by selecting more commands.
c) The selected command will be added to the quick access toolbar.
 4.1.2 . Ribbon
This is the entire display that is on the top of the MS Excel. It
contains multiple tabs which on the other hand have a number of grouped
commands. Ribbon is composed of three parts:

4.1.2.1 . Tabs
The ribbon contains eight tabs:
• Home: This tab contains commands for formatting worksheets, cells, and
data. It also has the commands for inserting and deleting rows and
columns.
• Insert: This tab is used to insert tables, charts, links, headers and footers
and many more
• Page layout: It is used to change the margin, page orientation, page
background and many more
• Formulas: This tab is used to browse for formulas, select and audit
formulas
• Data: Data tab is used to access external data, to access data tools, to sort
& filter, to group cells together and more
• Review: This tab is used to check the spelling, add comments, protect
your worksheet, and many more.
• View: The view tab is used to change workbook view, show or hide
gridlines, zoom in or out, and more

Note : These are the main tabs but there are other tabs called tool
tabs

4.1.2.2 . Groups
These are commands that are contained in each tab. For excel 2016 and 2019
there are some additional groups that are not present in the previous versions,
As I had mentioned earlier each tab contains a special group of command for
example:
• Home tab contains commands like cut, copy, format column, insert
 cells and delete cells and many more commands
• Insert tab contains commands like header and footer, table, shapes,
pictures and many more
• Page Layout tab , on the other hand, has commands such as Themes,
Page Setup, Scale to Fit, Sheet Options, Arrange and many more.
• Data tab contains Get & Transform Data, Queries & Connections, Sort
& Filter, Data Tools, Forecast, Outline and other commands
• Formulas tab contains commands such as Function Library, Defined
Names, Formula Auditing and Calculation
• Review tab contains tools like Proofing, Accessibility, Insights,
Language and many more commands.
• View tab has features such as Workbook Views, Show, Zoom,
Window and Macros

4.1.2.3 . Commands
These are controls that allow you to carry on particular tasks like wrapping texts
adding columns and many more.

4.1.2.4 . Name box

It is located on the left of the formula bar. It displays the name of the selected
cell. It is used to quickly create a name range.

4.1.3 . Formula bar

The formula bar is located directly above the worksheet area. There are three
icons before it namely; cancel, Enter, and insert function. ‘Cancel’ is the first
icon it performs the same function as Esc key. ‘Enter’ is the middle icon and is
used to accept the changes in the cell. It performs the same function as the Enter
key. Insert function is the last icon when clicked it opens a window with a list
of functions for you to choose.

4.1.4 . The file menu

It contains a rundown of options. I will go through them and give their
functions:
• New: This is used to start a new workbook
• Open: It is used to open an existing saved workbook. Save: It is
 used to save the workbook with a new name Save as : Used to save
an existing workbook.
• Print: It displays the print options where you can preview and change the
setting before sending the current worksheet workbook or cell for
printing.
• Share: It gives you the option to save your work in clouds for easy
retrieval in case you want to open your workbook on another device. It
also works as a backup in case you lose a workbook.
• Export: It is where you can change the file type or convert it to Adobe
PDF.
• Publish: Enables you to publish or transfer your workbook to Microsoft
Power BI.
• Close: It enables you to close the current workbook without exiting
Excel.

4.2 . The Worksheet Views and

Zoom Slider
These are the settings that allow you to choose the type of view you are most
comfortable with. It’s default view is… the Excel default view, obviously,
which is a table layout that extends to the far end of the screen.
You have other options to work with, however. On the bottom right of the
worksheet window, there are two other views you can choose from;
• Page Layout which breaks down the columns into pages.
• Page Break Preview which sets the visible cells to be limited to the last
cells used grid wise. Let’s say you have a table that is edited up to M69,
but the end column (let’s say P) was edited to 60. The page break will be
set at P69. [You can learn more about cells HERE in this e-book.]
• Excel also features a zoom slider which allows you to magnify the current
view of the page. It is set at 100% by default.
5 . Getting Started with The Workbook
The workbook window is where you are going to type in all of the data that you
want to be processed. Of course, you can also type in a few things on the
formula bar, but this is where the data is going to be stored.
In this chapter, we are going to focus on the basics of the workbook. This also
includes the preparation of the workbook for printing. OK, let’s dive in…
starting with the main focus of the day;

5.1 . The Worksheet

By now you’ve probably worked out the difference between the workbook and
a worksheet. Since I don’t want to leave any stone unturned, let me define it in
simple terms;
A workbook is a file containing one or more worksheets, just like an
ordinary book. The worksheet contains cells in which you type in data for
computation.
If you have different data to work with but in the same workbook, you can
create a new worksheet by clicking on the + icon right next
For us to move forward I’m going to create an imaginary company to provide
more detailed and realistic examples [the irony huh]. From now on, you are the
accountant of the new company; HANAE TECHNOLOGIES.
If you like, you can create your own company to work with, and just replace the
example data with your own company’s data. This may actually be a lot faster,
but probably confusing.

5.1.1 . Renaming a worksheet

HaNae Technologies is a startup and is budgeting for new equipment for the
office. You, however, don’t want to mix up the expenses since HR will be
needing a different type of report.
In the Workbook that you have just created, you are provided with one default
worksheet called ‘Sheet1’ you need to rename each of the worksheets you
create [as mentioned earlier before] to easily identify the type of data in each
spreadsheet.
To rename the spreadsheet, just right-click on the tab with the current name
you want to change, Sheet1 in this case, and click on ‘rename’. This tab is
located at the bottom-left side of the worksheet.

5.1.2 . Deleting a Worksheet

Using the same process, you can delete an existing worksheet.
Click on the name of the worksheet that you want to delete and click on ‘delete
in the dialogue box that pops up.
Note : Deleting a worksheet is irreversible; it cannot be undone, even
by pressing the undo button.
Alternatively, you can delete the current sheet you are on in the Home tab by
expanding the ‘delete tab’ and selecting ‘delete sheet’.
 5.1.3 . Copying/ Moving a Worksheet
This feature comes in handy when you want to export a specific worksheet
from a workbook to another. Let’s take, for example, you want to move HaNae
Tech’s Start-Up budget to an Archive Workbook;
Right-click on the spreadsheet tab you want to export or copy and select M ove
or copy…. A dialog box will pop up.
If you want to copy the spreadsheet rather than moving it, click on the
checkbox labeled ‘create a copy’ then select the preferred workbook. You
should otherwise leave it blank before proceeding in order to move it.
You should note that the workbook you are copying/ moving to is supposed to
be opened before proceeding. The workbook will not show up in the dialog
box.

5.1.4 . Changing the Worksheet Color

You can change the color of each worksheet to add more contrast to the
workbook. Colors can be determined through whatever criteria you want to
use. You can decide to change the tab color according to the priority of each
spreadsheet.
To change the color of the tabs, just click on the spreadsheet tab> ‘tab color’
and choose the color you wish to use in the dialog box that pops up.

5.1.5 . Scrolling Through the

Worksheet
Once you get a sizeable amount of data on a worksheet, the scroll bars are
going to expand, allowing you to access each and every one of the columns and
rows.
The scroll bars are located on the right edges of the workbook. To scroll
through the document, just drag the scroll bar by holding the left mouse button
down and moving the mouse through the direction of the scroll bar.

5.2 . Pinning the Workbook

Working with multiple files every day might inconvenience you when you want
to find an important document. With MS Excel, you can pin a workbook to the
File tab by clicking on File>Open>recent> [Select the workbook]> [right click
on the workbook]> Pin to list.

5.3 . Compatibility mode

When working with files that are made from the 2003 version of MS Excel, the
functions that you can use are going to be limited to later versions of the
program.
For example, when you access a file that was created with MS Excel 2003 on
office 2016, it will be opened in compatibility mode, limiting the use of
features introduced after the Excel update. Documents created with Excel
2007-~ can be opened without issues on any of the later versions… at least up
until the time this article was written.

5.3.1 . Converting Documents

Opening in Compatibility Mode
If you wish to open a document that opens in compatibility mode, all you have
to do is save the file using the “save as” feature. Click on file>save as> [select
storage location] > save.

5.4 . Saving and Sharing

Workbooks
You can save a workbook by simply pressing Ctrl+S while still on the workbook
window. Alternatively, you can save the file by clicking on File> Save File>
[select storage location] > save. You do not have to select the file destination
every time you save using this method.
Starting with the Office 2013, Microsoft introduced the cloud share feature; MS
OneDrive. OneDrive is a cloud storage and sharing platform that allows you to
sync your files between multiple devices.
On Windows 10, OneDrive is pre-installed. All you need is a Microsoft account
to log in and you gain access to a couple of gigabytes of storage and a
preconfigured folder that syncs to the cloud.
People, a program also included recently on Windows, is also included as a
sharing app to help you find your contacts easily.
You can either save the file on OneDrive directly and enjoy the perks of using
the OneDrive folder or save it on a destination of your choosing and share the
file with the two apps.
To share the file from Excel, go to File> Share> [choose how you want to
share it]


5.4.1 . Exporting Files

Excel allows you to save files in different file formats so that the document can
be readable on other programs. The most used file format during the
exportation of the file is the PDF (Portable Document Format).
Apart from the PDF file format, you can also export the file in a couple of other
file formats such as CSV, .txt, HTML, XPS among others.
To export the file in PDF format, go to File> Export> Create PDF/ XPS
Document. If you want to use other file formats, just click on the Change File
Type button and choose the desired file format.

NOTE:
The export process will only export one spreadsheet from
the workbook unless you update the export settings to export the

entire book. You can access the settings under options in the

export window that pops up.

6 . Cells
A cell is a single field in which you can input
data for computation. Each cell must have data
that relates to the rest in the column for batch
processing of data.
A group of cells is referred to as a cell range. You
can work with a number of cells at the same time
by selecting a cell range. All these might sound a
bit technical right now, but after we are finished
with this chapter, you should be able to work with
cells even to the most technical levels.
A cell is a product of rows and columns
intersecting, creating a grid table with cells being the
basic blocks. In the picture above, the selected cell is
A1 . The cells are named according to the intersecting
rows and columns.
You can select multiple cells by clicking on the first cell
you want to select and dragging through the worksheet
to the last one you are working on. In the picture on the
left, I have selected multiple cells on which I’m going
to work on. The selection can still be expanded by
reselecting the cell range.

Note: Selecting the cells and dragging the edge of the selection will
make alterations to the data on the new selections.

6.1 . Cell Content

Each cell in a column should contain similar content in order for the
computation to run without errors. Inputting different cell contents in a column
will make your work way harder and interfere with batch computations.
However, when the data needs to change, you can always stop the selection at
the point where the attributes are different. Not to worry, this scenario is going
to be spoon-fed to you as we advance in the chapter. For now, let’s have a look
at the different types of cell content you can input:

6.1.1 . Text
This is one of the most visual content a cell can contain. You can input various
types of text into cells including; Letters, Numbers, and dates.

6.1.2 . Formatting attributes

You can set a cell’s attributes to display certain texts differently. If you select a
formatting attribute and assign it to a whole column, the text in those fields will
be changed accordingly. This also includes postcalculated data which is also a
result of a formula placed in the group. This brings us to the next cell content to
explore

6.1.3 . Formulas & Functions

The formulas and functions are the ones that you specify in the cell for
computation. Any formula that is input in a cell or column is the cell is going to
perform the calculation assigned to determine the final cell value.
If there is an inconsistency in the type of data provided, some of the
calculations are going to be displayed as errors. Formulas and functions are
going to be discussed further later in the book.

6.2 . Inserting Content into Cells

To insert new data in a cell, click on it once and type in the content. Once you
are done, press enter and the cell should be updated.
You can also use the arrow keys to move between the cells you are editing.
Another way to input content in the cell is by selecting a cell and typing in its
content in the formula bar.
If you want to edit cell contents, double click on the cell you want to edit and
wait for the cursor to appear.

6.3 . Deleting Cells

You can delete cells by simply clicking on a cell or selecting multiple cells and
clicking on delete in the home tab. Once you delete the cells, the ones below
are going to shift upwards.
If you have corresponding data in the other columns and you do not want to
move the cells in that column upwards, you can delete the cell contents instead.
Select the cells you wish to delete and press delete from your keyboard. The
content is going to be deleted but the cells will remain intact.

6.4 . Dragging & Dropping Cells

Select the cells you want to move then click and hold them while moving your
mouse to the spot you want to move them. Once you release the mouse button,
the cell contents are going to be replaced.
You can always move the cell contents by cut & paste methods if you have
problems with your mouse. Just select the cells and press Ctrl+X then select the
first cell in the field that you want to move the contents then press Ctrl+V.
Alternatively, you can right-click on the selections to access the cut & paste
options.

6.5 . Using the Fill Handle

Some cells might share the same content, file attributes and/ or progress with
the same formula. Instead of copy-pasting the contents in each cell one by one,
you can drag the fill handle on the edge of your selection.

By default, the contents in the new cells are going to be analyzed and the most
appropriate formula [SUM] is going to be applied when dealing with numbers
and dates… basically, anything that can be added up.
You can avoid this by selecting two cells with the same value and dragging the
fill handle down. Letters, however, are just copied down to the last selection.
This method can also be used to continue a series of data in the cells. If the data
you are entering follows a certain pattern, you can select a couple of cells
you’ve manually entered and drag the fill handle. The program is going to
guess the pattern and fill in the cells accordingly.

6.6 . Find and Replace

 One thing that has become obvious, is that working with numerous cells can be
tedious, especially when you need to refer to some of them from time to time.
The find and replace feature is just what you need to find specific cells by
typing in the cell content. To find a certain cell or cells with the same cell
content, go to Home> Find & Select> Find.
Type in the data you want to find and hit enter. The program is going to display
the number of cells that have the same content you are searching for and allow
you to move through the document while highlighting the search results.
You can replace each and or every one of the cell content found in the search
by clicking on Replace in the window that popped up and selecting the cells to
replace or clicking on replace all.

6.7 . Formatting Cells

Cells can be edited to make cell content appear differently from the rest. You
can assign various attributes to specific cells in order for them to change the
format of display, even if it is data that has been posted after the cells have
been formatted.

6.7.1 . Changing fonts

To change the font in a particular cell or cells, first select the cell(s) and click
on the drop-down menu in Home> Font tab.
In the font tab, you can also change the font color, size, bold attributes and fill
color. The fill color is just the color that the cell is going to have.

6.7.2 . Cell Styles

Cell styles change the cell formatting to a unified theme. When you select a cell
style, you change every formatting that the cell has except the text alignment.
The Cell Style tab is located under the home tab and here, you can select a
number of pre-configured styles or create a new one.

6.8 . Merging Cells

When cells fall under the same category or contain the same value, you can
merge the cells in order for them to display the same values.
To merge the cells, select the cells you wish to merge and go to Home – Merge
& Center. You can change the merge settings by clicking on the drop-down
arrow next to the Merge & Center option.

7 . Formulas and Functions

These are the features of Excel that allow you to perform various calculations
within the cells, columns, and rows. All formulas MUST start with the = sign .
Let’s start off with the basic formulas and functions that you can use in
financial operations;
 7.1 . Simple Formulas
These are just basic calculations that do not require deep knowledge of the
formulas to understand you they work. They include addition, subtraction,
multiplication, and division.

7.1.1 . Creating Simple Formulas

You are trying to add HaNae Tech’s total startup cost. In the illustration below,
you are going to select B13 as the cell that holds the formula for the
calculation.
Select cell B13 then type in =B4+B5+B6 up to the last cell you want to add
up. This should give you more control over what you want to add up in the
series.
The selections are going to be highlighted with different colors on the borders
in order for you to differentiate the selections properly.
 The same
method can be applied to all the other basic formulas. Each of the formulas is
represented by a unique symbol.
• + for addition as we saw earlier.
• - for subtraction
• * for multiplication
• / for division
• ^ for exponents

Tip : Alternatively, you can create a formula by going to the endpoint

[B13], selecting the cell the calculation is going to start from [B4], typing in the
= sign, typing in the symbol of the desired formula [+] and selecting the second
cell in the equation [B5].
If you want to include more cells in the formula, you’ll have to type in the
symbol for the formula [+] in this case] before selecting the next cell.

7.2 . Complex Formulas

Complex formulas are the ones that possess more than one type of calculation.
Simple formulas can be as easy as adding 7 to 9. Complex formulas, however,
might include multiplication before or after the addition of the numbers.
For example; you want to find the percentage of the balance you have in your
account after every purchase you make for the company.
You are going to create a new column labeled % Balance and type in the
following= =(D2-B4)/D2
The formula means that the value of B4 is going to be subtracted from the
value of D2 then divided by the value of D2, which in this case is a constant.
The value of D2 is the starting capital. Therefore, dividing it with the balance
after every purchase will give the percentage of the balance in decimal form.
You can change the cell attributes in the Home> Number Format tab to display
the value of the cell in percentage.

But how are you going to get the next value of the cell below?
You are going to have to introduce more brackets to instruct the program to
start by converting the value of the cell E4 back to the monetary value before it
calculates the new percentage of E5.
Click on E5 and type in the following formula:
=((E4*D2)-B5)/D2

The values in the inner bracket are going to be calculated first. This is going to
change back the value of the cell to the remaining balance. Afterward, the
value in the outer bracket is going to be calculated, giving the result of
subtracting the cost of buying tables from the remaining balance.
After the values within the brackets have been calculated, the result is going to
be divided by the starting balance to give the remaining balance in decimal
form. The final value is going to be converted to a percentage automatically if
you changed the cell attributes to show the percentage.

7.3 . Automatic Formula Cell Fill

 Instead of filling in the same formula in each cell. You can drag the fill handle
down to automatically add the formula in each cell.
Let’s say you want to calculate just the remaining balance after each purchase
but enter the formula only once or twice. Click on the first cell to calculate
(D4) and type:
=D2-B4
Click on the cell below and type:
=D4-B5
The first formula is going to find the first remaining value, but you have to
find the second one because of the nonnumerical data above D4.
After you find the second value, you can now drag the fill handle to calculate
the rest of the cell values in the column.
You can also drag it down to the empty cells so that anything you might add
in the future will also be calculated automatically.
 7.4 . Functions
Functions are predefined formulas that calculate cell values in a particular
order. The functions are way simpler to use when compared to typing in
formulas. They are like simplified formulas, but way complex to use.
You can picture a formula as an abacus. A simple machine for calculation yet
hard to use. In this analogy, picture a function as a fully operational Windows
Operating System with various tools for calculation, like Excel. It is more
complex but easier to use… but all this depends on your perspective.
Functions are written in a certain order called the syntax. The syntax consists of
an equal sign, the function name, and one or more arguments.
The arguments consist of cells/ cell ranges that are separated with parentheses.
When you are working with multiple arguments, the cell ranges should be
separated with a comma. E.g. =SUM (B5:B10,C8,D9:D12). The syntax is going
to add the values of cells B5-B10 together with cell C8 and D9-D12.

7.4.1 . Creating a Simple Function

You want to find the average expenditure of HaNae Tech during start-up and
you don’t have the time to type in a whole formula that will calculate the
average.
• Go to the cell assigned for the average value and type the = sign followed
by AVERAGE then a bracket [(].
• Go to the first cell you want to compute and select the rest by dragging
down the cursor up to the last cell. You can type in the cell range
alternatively.
 • Press enter. The value displayed
in the cell is now the average expenditure.
Excel automatically completes the syntax so that you do not have to close the
brackets every time you complete a function.
The program also shows suggestions for the type of function you are trying to
type.
When you start typing in a function, the program is going to show a list of
functions that start with the letters you type in, hence you do not have to type in
the whole name if you want to move a lot faster.

7.4.2 . Using AutoSum

Once you have used a bunch of functions in your spreadsheet, you can now use
the AutoSum function to automatically complete functions for you.
The AutoSum feature is located on the top right side of the window under Home
> Editing.
In the illustration below, I’ve used the AutoSum feature
to calculate the total cost of buying the new office
equipment for the company.

7.5.1 . Financial Functions

Our main focus of the day is going to be financial functions since, well… the
book and all. There are so many other functions that you can explore in the
Functions Library, but for now, let’s have a look at the ones that can help you
with your daily financial operations.
a ) PMT | RATE | NPER | PV | FV
These are functions that help you calculate financial operations dealing with
loans. HaNae Tech took a loan of $200000 from a bank that offers an interest
rate of 8% PA and the amount is to be repaid within a period of 3 years.
Here is how you can use this group of functions to calculate the values of the
loan terms;
PMT
PMT finds the amount of money that you are going to pay every month.

In this illustration, the monthly payments have been calculated at a rate of 8

percent per year and a period of three years. The function is automatically
going to update the cell value once the values of the other cells change.
RATE
Rate can be calculated with the RATE function if it is the only unknown value
in the table.

NPER
The NPER function calculates the period needed for the loan to be cleared. We
already know that the loan will be cleared in 36 months if the rate remains at 1
percent and the monthly payment at 6,267.27 euros.
So let’s change the monthly payments to see how it shall affect the period it is
going to be cleared. The company has decided to pay 7000 Euros every month,
so the new period is going to be 31.8 months as shown

PV
PV calculates the amount that you can borrow if you already have the other
values. Let’s see how much you can borrow if you are going to make payments
of 7000 euros in a period of 3 years:
If the period remains constant HaNae Tech is able to borrow € 223,382.64 that
should be cleared in exactly three years.
FV
This function calculates the amount of money that you are still going to owe
after a certain period. The value is 0 by default.
Let’s say HaNae Tech decides to go back to the original monthly payments in
the first month, but already took a loan of € 223,382.64. How much will still be
owed after a period of 3 years? Well, let this be a challenge for you. Find the
future value and post it in the workbook provided.
PPMT & IPMT
Let’s say that you want to find the actual value of the principal in a particular
payment. You want to find the principal of the 6 th payment that you are going to
make. Here is how you find it:

The PPMT function calculated the principal part of the 7 th payment and the
result is -€ 5,134.62. This is the monthly Principal.
You now want to find the interest paid on the 7 th payment. This is when you use
the IPMT function:
The interest paid by HaNae tech is € 1,132.66. When you add up the total
[principal interest] you should be able to get the monthly payment.
b ) Investment or Annuity
HaNae Tech has gotten a bit of income and has decided to toss some profits in
the bank for profits. HaNae Tech is investing the profits received from the sales
at a rate of 8% and wants to see how much the investment will yield after a
period of one decade.
You will use the FV function to find the actual value after 10 years.
Let’s say you invest 2000 euros every year, this is going to be the total amount
in your account after ten years;

Annuity
Suppose HaNae Tech wants to purchase an annuity that will pay $1600 a
month, for the next 12 years at an annual interest rate of 8%. This is how you
are going to find the cost of the annuity;
HaNae Tech will make a one-time payment of-€ 384,813.42 (negative) to pay
this annuity.

c ) Compound Interest

HaNae Tech also decides to invest 2000 euros at a compound interest of

12%. To get the first year’s total amount in the bank, you need to multiply
the current amount with the interest rate + original percentage which equals
to 112%:
The same goes for the rest of the years. Instead of typing the formula over
and over again, it is time to turn back to the sweet old fill handle and let the
program do the rest as illustrated here:
The arrow points out the formula used in the practice worksheet. Of course,
yours may be a bit different if you are not using the practice workbook
provided.
There is no special function for the calculation of compound interest, so you
just have to create the function yourself… bummer!
d ) IRR
Use the IRR function in Excel to calculate a project's internal rate of return.
The internal rate of return is the discount rate that makes the net present value
equal to zero.
In this example, we expect a profit of €0 at the end of the first period, a profit of
€0 at the end of the second period and a profit of € 2152.09 at the end of the
third period.

In order for you to properly calculate the net present value of a project, you
should use the NPV function to calculate the present value of a series of future
cash flows and subtract the initial investment as illustrated in the practice
workbook.
The internal rate of return is the discount rate that makes the net present value
equal to zero.

8 . Cash Flow Statements

A cash flow projection is an estimate of cash funds a business forestalls
receiving and paying out throughout the course of a given span of time, and the
projected cash position at specific times during the period being projected.
The purpose of preparing a cash flow projection is to determine shortages or
excesses in cash from that necessary to operate the business during the time for
which the projection is prepared.
If cash shortages are revealed, financial plans must be altered to provide more
cash until a proper cash flow balance is obtained.
For example, more owner cash, loans, increased selling prices of products, or
fewer credit sales to customers will provide more cash to the business.
Ways to reduce the amount of cash paid out include having less inventory [you
can sell some of the assets to gain more financial resources], reducing
purchases of equipment or other fixed assets, or disregarding some operating
expenses.
For example, the startup budget for HaNae Tech was primarily focused on
coffee. You can save up lots of money by reducing the amount of coffee
purchased [be prepared to greet cranky faces in the morning].
If excesses of cash are revealed, it might indicate excessive borrowing or idle
money that could be used for more coffee… just kidding. The objective is to
finally develop a plan which, if followed, will provide a wellmanaged flow of
cash. See my other books for a detailed explanation of cash flow statements.
The picture below shows part of a cash flow statement template for HaNe Tech;

This template has been provided with detailed instructions on how to use it in
the practice workbook.

9 . Advanced Charts
Excel allows you to include charts in your worksheet. Creating multiple charts
in a single sheet when they represent the same data is kind of tedious and pretty
hard to go through. You can create advanced charts that represent all the data
you need and lay them out in an organized manner.
In this example, we are going to start out by creating a simple chart, then
progress it to a more advanced one.
Creating Advanced Charts
HaNae Tech is creating a chart to represent the yearly financial progress of the
company. Here is the table from which the chart is going to be drawn from;

We are going to start off by creating a basic chart showing all the data in just
one instance.
• Select the cell range that has the data you want to include in the chart…
in this case, it is all the cells with data.
• Move to the insert tab and select the desired chart in the chart tab.
• Once you select the chart, Excel will automatically compile the chart
with the given data.
• You should have something that looks like the one below if you selected
the 2D column chart;
As you can see, the data is not effectively represented since some of the values
are way small for the table to show them in one instance.
In order for you to change the representation of the data, click on one of the
visible bars and head over to the format tab and select the data series that you
wish to edit.
Right-click on the new columns selected, navigate to “Format Data Series,” and
then in the right sidebar that appears select “Secondary Axis.”
Right-click on the newly selected columns, head up to the “Chart Design” tab
in the ribbon, click the “Change Chart Type” button, and then select your line
chart.

This data should now be represented by a line graph that is more visible in the
chart. This is an example of an advanced chart. In the practice workbook, a
more detailed explanation of advanced charts has been provided. You should
also find other types of charts in the workbook to help you create more charts.