Book Financial Modeling: Excel and Array Functions

Learning Journal
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Course
Date
Book Financial modeling Chapter 33: Excel Functions
Summary
The Excel function is a predefined procedure incorporated into Excel since and helps to perform calculations using the data provided. Among the functions used in Excel program are financial functions, statistical functions, regression functions, conditional functions and offset as well as other functions such as time and date functions. Financial functions are among the most important in financial modeling and this includes the Net PresentValue (NPV) to calculate the discounted cash flows in capital budgeting or investment projects. When calculating payments one must consider whether the formula results in negative values for the future or present values. The loan payments calculations include the PMT, IPMT and PPMT functions and perform the calculation. The Excel functions help one to identify the details that need to be entered in these spreadsheets depending on what one wants to calculate.
Reflecting
To correctly use the Excel functions there is a need to know about the arguments and how they are used. Excel is useful when there are mathematical functions as the Excel sheet allows calculation with the data using the identified functions. These calculations include simple additions and multiplications to more complex functions that use financial modeling. As there is a wide range of functions available, understanding how these functions are used is necessary to get the desired outcome. Excel is a great work tool to perform calculations quickly and efficiently and reliable to build financial models, which allows one to analyze the impact of decision such as loans and investments. There are also other useful Excel functions to identify patterns such as in regressio...