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Hands-On Financial Modeling with Microsoft Excel 2019

You're reading from   Hands-On Financial Modeling with Microsoft Excel 2019 Build practical models for forecasting, valuation, trading, and growth analysis using Excel 2019

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Product type Paperback
Published in Jul 2019
Publisher Packt
ISBN-13 9781789534627
Length 292 pages
Edition 1st Edition
Tools
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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 (15) Chapters Close

Preface 1. Section 1: Financial Modeling - Overview FREE CHAPTER
2. Introduction to Financial Modeling and Excel 3. Steps for Building a Financial Model 4. Section 2: The Use of Excel - Features and Functions for Financial Modeling
5. Formulas and Functions - Completing Modeling Tasks with a Single Formula 6. Applying the Referencing Framework in Excel 7. Section 3: Building an Integrated Financial Model
8. Understanding Project and Building Assumptions 9. Asset and Debt Schedules 10. Cash Flow Statement 11. Valuation 12. Ratio Analysis 13. Model Testing for Reasonableness and Accuracy 14. Another Book 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 to three parts with the use of Alt + Enter, as follows:

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

As we can see, this makes it easier to decipher.

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