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Hands-On Financial Modeling with Excel for Microsoft 365

You're reading from   Hands-On Financial Modeling with Excel for Microsoft 365 Build your own practical financial models for effective forecasting, valuation, trading, and growth analysis

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Product type Paperback
Published in Jun 2022
Publisher Packt
ISBN-13 9781803231143
Length 346 pages
Edition 2nd Edition
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Author (1):
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Shmuel Oluwa Shmuel Oluwa
Author Profile Icon Shmuel Oluwa
Shmuel Oluwa
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Table of Contents (19) Chapters Close

Preface 1. Part 1 – Financial Modeling Overview
2. Chapter 1: An Introduction to Financial Modeling and Excel FREE CHAPTER 3. Chapter 2: Steps for Building a Financial Model 4. Part 2 – The Use of Excel Features and Functions for Financial Modeling
5. Chapter 3: Formulas and Functions – Completing Modeling Tasks with a Single Formula 6. Chapter 4: Referencing Framework in Excel 7. Chapter 5: An Introduction to Power Query 8. Part 3 – Building an Integrated 3-Statement Financial Model with Valuation by DCF
9. Chapter 6: Understanding Project and Building Assumptions 10. Chapter 7: Asset and Debt Schedules 11. Chapter 8: Preparing a Cash Flow Statement 12. Chapter 9: Ratio Analysis 13. Chapter 10: Valuation 14. Chapter 11: Model Testing for Reasonableness and Accuracy 15. Part 4 – Case Study
16. Chapter 12: Case Study 1 – Building a Model to Extract a Balance Sheet and Profit and Loss from a Trial Balance 17. Chapter 13: Case Study 2 – Creating a Model for Capital Budgeting 18. Other Books You May Enjoy

Pitfalls to avoid

In constructing your formulas, it is easy to get carried away and, very soon, the formula becomes very complex and unfriendly. While it is desirable to keep formulas compact, they should be simple and easy for a third party to follow. If necessary, break up the formula into two or more parts so that it becomes easier to follow while retaining the original effect.

Alternatively, you can use Alt + Enter to force part of the formula to the next line. This will not affect the result of the formula, but it will make the formula easier to understand. Consider the following example:

=INDEX(C5:G10,MATCH(J20,C5:C10,0),MATCH(K19,C5:G5,0))

This complex formula can be broken down into three parts with the use of Alt + Enter, as follows:

=INDEX(C5:G10,
MATCH(J20,C5:C10,0),
MATCH(K19,C5:G5,0))

The formula remains within the same cell but is displayed on 3 lines. As we can see, this makes it easier to decipher.

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