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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

Troubleshooting

It is unprofessional to share a model that is full of errors. You should always check your model for errors and then take steps to correct them.

The following are guidelines to follow when errors are detected in your model:

  • Precedents are those cells that have been referred to in arriving at the value in a particular cell.
  • Dependents are those cells that have included the cell in focus in their formula.

The following illustration will be used to explain this further:

Figure 11.03 – Cells connected as dependents or precedents

Look at cell K8. The formula in that cell is =K6*(1-$D$7). The formula relies on the contents of cells K6 and D7, which makes them precedents of cell K8. On the other hand, cell K8 is a dependent of both cells K6 and D7.

On the formula ribbon, in the formula auditing group, selecting trace precedents or trace dependents reveals thin blue arrows linking a cell to either its precedents or...

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