Microsoft Excel offers far more than just a basic spreadsheet. By employing one or more of the function formulas, financial professionals can unlock a powerful tool that tracks, computes, and analyzes data effortlessly.
While Excel offers dozens of function formulas, most financial professionals find they rely on a handful of formulas to do most of the heavy lifting in their day-to-day analyses. Use these top five basic formulas to tap into your software’s abilities and improve your work.
The “IF” function allows the user to apply conditions to certain cells or fields by checking to see if the condition in a specified cell or field is true or false. If it is true, Excel carries out one function; if it is false, Excel carries out another.
The IF function allows the same set of formulas to be used for all the data in the spreadsheet, regardless of whether or not it meets the “IF” condition: the IF function determines this step automatically. It saves the trouble of creating a separate set of formulas for each set of data.
SUMIFS allows multiple IF functions to be carried out in the same field. By allowing the user to create multiple criteria, SUMIFS makes it simple to create concise summaries out of large amounts of data.
For example, suppose that within the total travel expenses budget for October, you wanted to know which expenses were uncategorized, totaled an amount over $25, and were completed online. SUMIFS allows you to find this data with a single formula, rather than requiring a separate formula for each condition.
IFERROR is a variation on the IF function that allows the user to tell Excel what to do if a calculation results in an error. Instead of the usual “#ERROR!” tag appearing in an erroneous field, the user can set a specific message, such as “does not compute” or “refer to CFO.” IFERROR is particularly valuable when several different people will be working within the same spreadsheet or set of spreadsheets.
Picture an Excel spreadsheet with two columns. Column A has 416 rows; Column B has 433 rows. Columns A and B are supposed to match up – but they don’t.
Many people will attempt to reconcile the two columns by “eyeballing” which information is in one but not the other. VLOOKUP, however, offers an easier solution by automatically identifying which information is in one Column but not the other.
Operators allow Excel users to create sophisticated conditions and combine formulas, allowing for greater precision. The two most commonly-used operators are AND and OR. Both originate in mathematics and Boolean logic, and they are invaluable for specifying exactly what a single formula should consider when running calculations.
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