Principles of Finance 4 questions Due 8/28/18 12 pm EST

Financial Management

Chapter 1

Use of Spreadsheets

 

 

(Print out this information sheet.  Bring Excel up on your computer and try the computations on the Excel spreadsheet as I explain the formulas.)

 

Spreadsheets are an extremely useful tool in Financial Management as they allow one to solve both simple and complicated calculations at the push of a few buttons or inclusion of a formula. Throughout this course you will be required to complete your homework assignments using a spreadsheet such as Excel. I will assume that not everyone in the class knows how to get the most benefit out of a tool such as a spreadsheet by using cell formulas and functions.

 

We are going to start with simple basics and work our way up as we progress through this course.  Let’s take two numbers and use them to demonstrate the four basic functions of addition, subtraction, multiplication and division.  For purposes of illustration we will use 248 and 136.

 

 

ADDITION

 

The first rule is to isolate each number in a cell so that you may refer to that cell when creating your formula.  Each cell has an address composed of a letter and a number.  For instance the first cell on any spread sheet has the address A1.  Each column is identified by a letter and each row is identified by a number.

 

	A	B	C	D
1	248
2	136
3
4

 

Enter the number 248 in cell A1 and 136 in cell A2.  To have the spreadsheet calculate the addition of these two numbers, You need to enter a formula in the next cell.  Each formula on a spreadsheet begins with an equal sign (=).  In cell A3 enter the formula =A1+A2 and the total of the two numbers will appear in cell A3. The formula is entered this way:

 

1.     With your cursor on cell A3, type the =

2.     Put your cursor on cell A1 and left click

3.     Type the +

4.     Put your cursor on cell A2 and left click

5.     Hit enter

 

In cell A3 should appear the total value of 384.

 

	A	B	C	D
1	248
2	136
3	384
4

 

If you have more than two numbers to add, you can use a different formula.  Let’s take the numbers listed below and add them on the spreadsheet.

 

	A	B	C	D
1	248
2	136
3	799
4	653
5	147
6

 

To add a column of numbers, use the SUM function.  The formula in cell A6 would be 

 

              =sum(A1:A5)

 

Enter this formula and you should see a total of 1983 appear in cell A6.  The formula tells the spreadsheet software to add together all numbers contained in the cells A1 through A5.

 

 

SUBTRACTION

 

To subtract you merely substitute the minus (-) sign for the plus (=) sign in your formula.  Your formula in cell A3 should be =A1-A2.  Do you come up with 112 for an answer?

 

	A	B	C	D
1	248
2	136
3	112
4

 

 

MULTIPLICATION

 

To multiply two numbers, substitute the asterisk (*) for the plus sign.  Your formula in A3 would look like this:

                   =A1*A2

 

	A	B	C	D
1	248
2	136
3	33728
4

 

 

DIVISION

 

To divide two numbers, substitute the slash (/) for the plus sign.  Your formula in A3 would look like this:

 

                   +A1/A2

 

	A	B	C	D
1	248
2	136
3	1.823529
4

 

 

These are the four basic cell formulas.  We will be adding to these as we proceed through the course.  If you have any difficulty with these formulas, please let me know and I will walk you through them.