- •About the Author
- •About the Technical Editor
- •Credits
- •Is This Book for You?
- •Software Versions
- •Conventions This Book Uses
- •What the Icons Mean
- •How This Book Is Organized
- •How to Use This Book
- •What’s on the Companion CD
- •What Is Excel Good For?
- •What’s New in Excel 2010?
- •Moving around a Worksheet
- •Introducing the Ribbon
- •Using Shortcut Menus
- •Customizing Your Quick Access Toolbar
- •Working with Dialog Boxes
- •Using the Task Pane
- •Creating Your First Excel Worksheet
- •Entering Text and Values into Your Worksheets
- •Entering Dates and Times into Your Worksheets
- •Modifying Cell Contents
- •Applying Number Formatting
- •Controlling the Worksheet View
- •Working with Rows and Columns
- •Understanding Cells and Ranges
- •Copying or Moving Ranges
- •Using Names to Work with Ranges
- •Adding Comments to Cells
- •What Is a Table?
- •Creating a Table
- •Changing the Look of a Table
- •Working with Tables
- •Getting to Know the Formatting Tools
- •Changing Text Alignment
- •Using Colors and Shading
- •Adding Borders and Lines
- •Adding a Background Image to a Worksheet
- •Using Named Styles for Easier Formatting
- •Understanding Document Themes
- •Creating a New Workbook
- •Opening an Existing Workbook
- •Saving a Workbook
- •Using AutoRecover
- •Specifying a Password
- •Organizing Your Files
- •Other Workbook Info Options
- •Closing Workbooks
- •Safeguarding Your Work
- •Excel File Compatibility
- •Exploring Excel Templates
- •Understanding Custom Excel Templates
- •Printing with One Click
- •Changing Your Page View
- •Adjusting Common Page Setup Settings
- •Adding a Header or Footer to Your Reports
- •Copying Page Setup Settings across Sheets
- •Preventing Certain Cells from Being Printed
- •Preventing Objects from Being Printed
- •Creating Custom Views of Your Worksheet
- •Understanding Formula Basics
- •Entering Formulas into Your Worksheets
- •Editing Formulas
- •Using Cell References in Formulas
- •Using Formulas in Tables
- •Correcting Common Formula Errors
- •Using Advanced Naming Techniques
- •Tips for Working with Formulas
- •A Few Words about Text
- •Text Functions
- •Advanced Text Formulas
- •Date-Related Worksheet Functions
- •Time-Related Functions
- •Basic Counting Formulas
- •Advanced Counting Formulas
- •Summing Formulas
- •Conditional Sums Using a Single Criterion
- •Conditional Sums Using Multiple Criteria
- •Introducing Lookup Formulas
- •Functions Relevant to Lookups
- •Basic Lookup Formulas
- •Specialized Lookup Formulas
- •The Time Value of Money
- •Loan Calculations
- •Investment Calculations
- •Depreciation Calculations
- •Understanding Array Formulas
- •Understanding the Dimensions of an Array
- •Naming Array Constants
- •Working with Array Formulas
- •Using Multicell Array Formulas
- •Using Single-Cell Array Formulas
- •Working with Multicell Array Formulas
- •What Is a Chart?
- •Understanding How Excel Handles Charts
- •Creating a Chart
- •Working with Charts
- •Understanding Chart Types
- •Learning More
- •Selecting Chart Elements
- •User Interface Choices for Modifying Chart Elements
- •Modifying the Chart Area
- •Modifying the Plot Area
- •Working with Chart Titles
- •Working with a Legend
- •Working with Gridlines
- •Modifying the Axes
- •Working with Data Series
- •Creating Chart Templates
- •Learning Some Chart-Making Tricks
- •About Conditional Formatting
- •Specifying Conditional Formatting
- •Conditional Formats That Use Graphics
- •Creating Formula-Based Rules
- •Working with Conditional Formats
- •Sparkline Types
- •Creating Sparklines
- •Customizing Sparklines
- •Specifying a Date Axis
- •Auto-Updating Sparklines
- •Displaying a Sparkline for a Dynamic Range
- •Using Shapes
- •Using SmartArt
- •Using WordArt
- •Working with Other Graphic Types
- •Using the Equation Editor
- •Customizing the Ribbon
- •About Number Formatting
- •Creating a Custom Number Format
- •Custom Number Format Examples
- •About Data Validation
- •Specifying Validation Criteria
- •Types of Validation Criteria You Can Apply
- •Creating a Drop-Down List
- •Using Formulas for Data Validation Rules
- •Understanding Cell References
- •Data Validation Formula Examples
- •Introducing Worksheet Outlines
- •Creating an Outline
- •Working with Outlines
- •Linking Workbooks
- •Creating External Reference Formulas
- •Working with External Reference Formulas
- •Consolidating Worksheets
- •Understanding the Different Web Formats
- •Opening an HTML File
- •Working with Hyperlinks
- •Using Web Queries
- •Other Internet-Related Features
- •Copying and Pasting
- •Copying from Excel to Word
- •Embedding Objects in a Worksheet
- •Using Excel on a Network
- •Understanding File Reservations
- •Sharing Workbooks
- •Tracking Workbook Changes
- •Types of Protection
- •Protecting a Worksheet
- •Protecting a Workbook
- •VB Project Protection
- •Related Topics
- •Using Excel Auditing Tools
- •Searching and Replacing
- •Spell Checking Your Worksheets
- •Using AutoCorrect
- •Understanding External Database Files
- •Importing Access Tables
- •Retrieving Data with Query: An Example
- •Working with Data Returned by Query
- •Using Query without the Wizard
- •Learning More about Query
- •About Pivot Tables
- •Creating a Pivot Table
- •More Pivot Table Examples
- •Learning More
- •Working with Non-Numeric Data
- •Grouping Pivot Table Items
- •Creating a Frequency Distribution
- •Filtering Pivot Tables with Slicers
- •Referencing Cells within a Pivot Table
- •Creating Pivot Charts
- •Another Pivot Table Example
- •Producing a Report with a Pivot Table
- •A What-If Example
- •Types of What-If Analyses
- •Manual What-If Analysis
- •Creating Data Tables
- •Using Scenario Manager
- •What-If Analysis, in Reverse
- •Single-Cell Goal Seeking
- •Introducing Solver
- •Solver Examples
- •Installing the Analysis ToolPak Add-in
- •Using the Analysis Tools
- •Introducing the Analysis ToolPak Tools
- •Introducing VBA Macros
- •Displaying the Developer Tab
- •About Macro Security
- •Saving Workbooks That Contain Macros
- •Two Types of VBA Macros
- •Creating VBA Macros
- •Learning More
- •Overview of VBA Functions
- •An Introductory Example
- •About Function Procedures
- •Executing Function Procedures
- •Function Procedure Arguments
- •Debugging Custom Functions
- •Inserting Custom Functions
- •Learning More
- •Why Create UserForms?
- •UserForm Alternatives
- •Creating UserForms: An Overview
- •A UserForm Example
- •Another UserForm Example
- •More on Creating UserForms
- •Learning More
- •Why Use Controls on a Worksheet?
- •Using Controls
- •Reviewing the Available ActiveX Controls
- •Understanding Events
- •Entering Event-Handler VBA Code
- •Using Workbook-Level Events
- •Working with Worksheet Events
- •Using Non-Object Events
- •Working with Ranges
- •Working with Workbooks
- •Working with Charts
- •VBA Speed Tips
- •What Is an Add-In?
- •Working with Add-Ins
- •Why Create Add-Ins?
- •Creating Add-Ins
- •An Add-In Example
- •System Requirements
- •Using the CD
- •What’s on the CD
- •Troubleshooting
- •The Excel Help System
- •Microsoft Technical Support
- •Internet Newsgroups
- •Internet Web sites
- •End-User License Agreement
Part II: Working with Formulas and Functions
TABLE 15.4 (continued)
Cell |
Formula |
Description |
|
|
|
B13 |
None (input cell) |
The annual interest rate |
|
|
|
B16 |
=B4 |
Displays the initial investment amount |
|
|
|
B17 |
=B5*B6*B10 |
Calculates the total of all regular deposits |
|
|
|
B18 |
=B16+B17 |
Adds the initial investment to the sum of the deposits |
|
|
|
B19 |
=B13*(1/B6) |
Calculates the periodic interest rate |
|
|
|
B20 |
=FV(B19,B6*B10,- |
Calculates the future value of the investment |
|
B5,-B4,IF(B7,1,0)) |
|
|
|
|
B21 |
=B20-B18 |
Calculates the interest earned from the investment |
|
|
|
Depreciation Calculations
Excel offers five functions to calculate depreciation of an asset over time. Depreciating an asset places a value on the asset at a point in time, based on the original value and its useful life. The function that you choose depends on the type of depreciation method that you use.
Table 15.5 summarizes the Excel depreciation functions and the arguments used by each. For complete details, consult the Excel online Help system.
TABLE 15.5
Excel Depreciation Functions
Function |
Depreciation Method |
Arguments* |
|
|
|
SLN |
Straight-line. The asset depreciates by the same amount |
Cost, Salvage, Life |
|
each year of its life. |
|
|
|
|
DB |
Declining balance. Computes depreciation at a fixed rate. |
Cost, Salvage, Life, Period, |
|
|
[Month] |
|
|
|
DDB |
Double-declining balance. Computes depreciation at an |
Cost, Salvage, Life, Period, |
|
accelerated rate. Depreciation is highest in the first period |
[Factor |
|
and decreases in successive periods. |
|
|
|
|
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Chapter 15: Creating Formulas for Financial Applications
Function |
Depreciation Method |
Arguments* |
|
|
|
SYD |
Sum of the year’s digits. Allocates a large depreciation in |
Cost, Salvage, Life, Period |
|
the earlier years of an asset’s life. |
|
|
|
|
VDB Variable-declining balance. Computes the depreciation of an asset for any period (including partial periods) using the double-declining balance method or some other method you specify.
Cost, Salvage, Life, Start
_Period, End_Period,
[Factor], [No Switch]
* Arguments in brackets are optional.
Here are the arguments for the depreciation functions:
•Cost: Original cost of the asset.
•Salvage: Salvage cost of the asset after it has fully depreciated.
•Life: Number of periods over which the asset will depreciate.
•Period: Period in the life for which the calculation is being made.
•Month: Number of months in the first year; if omitted, Excel uses 12.
•Start_Period:Starting period for the depreciation calculation.
•End_Period: Ending period for the depreciation calculation.
•Factor: Rate at which the balance declines; if omitted, it is assumed to be 2 (that is, double-declining).
•No Switch: TRUE or FALSE. Specifies whether to switch to straight-line depreciation when depreciation is greater than the declining balance calculation.
Figure 15.15 shows depreciation calculations using the SLN, DB, DDB, and SYD functions. The asset’s original cost, $10,000, is assumed to have a useful life of 10 years, with a salvage value of $1,000. The range labeled Depreciation Amount shows the annual depreciation of the asset. The range labeled Value of Asset shows the asset’s depreciated value over its life.
On the CD
This workbook is available on the companion CD-ROM. The file is named depreciation calculations
.xlsx.
Figure 15.16 shows a chart that graphs the asset’s value. As you can see, the SLN function produces a straight line; the other functions produce a curved line because the depreciation is greater in the earlier years of the asset’s life.
351
Part II: Working with Formulas and Functions
FIGURE 15.15
A comparison of four depreciation functions.
FIGURE 15.16
This chart shows an asset’s value over time, using four depreciation functions.
352
Chapter 15: Creating Formulas for Financial Applications
The VBD function is useful if you need to calculate depreciation for multiple periods (for example, years 2 and 3). Figure 15.17 shows a worksheet set up to calculate depreciation using the VBD function. The formula in cell B11 is
=VDB(B2,B4,B3,B6,B7,B8,B9)
FIGURE 15.17
Using the VBD function to calculate depreciation for multiple periods.
The formula displays the depreciation for the first three years of an asset (starting period of 0 and ending period of 3).
353