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Three-Dimensional Formulas, the Table Feature and Circular References

It is often difficult to work with workbooks containing more than one worksheet. In this Unit we will discuss Excel's 3 dimensional
(3D) formula capabilities. 3D formulas often make it easier to combine data from different worksheets.

Most users of Excel continually add new data (rows) to their spreadsheet or add new formulas (columns) to their spreadsheet; they
are then frustrated when their formulas, formatting and/or charts do not automatically update to include the changes in their
worksheet. In this unit we show you how Excel's Table feature can often ensure that your formulas, formatting, and/or charts will
automatically update to reflect changes in your spreadsheet.

Three-Dimensional Formulas

WHAT IS A THREE-DIMENSIONAL FORMULA?

Please download the workbook [Link].

In this section we will begin by learning how to create three-dimensional formulas. Three-dimensional formulas let you easily
combine data from multiple worksheets. For example, we will show how to combine Le Napoleon's monthly sales (listed in
individual worksheets) in a consolidated worksheet which gives total sales for each product.
EXAMPLE PROBLEM:
CREATE A WORKSHEET ON WHICH TO CONSOLIDATE FIGURES

The workbook [Link] contains individual worksheets for the units sold of each Le Napoleon product during the months January
through May. Note that in each worksheet the product names are listed in cells I5:I18 with the sales for each product listed in cells
J5:J18. Let's insert a new worksheet in which we can total the sales of each product for the time frame January through May.
ENTER PRODUCT NAMES

Next, we will enter the product names in cells I5:I18 of the consolidated worksheet.

USE A THREE-DIMENSIONAL FORMULA TO SUM ACROSS WORKSHEETS

Next we will use a three-dimensional formula to add up the five monthly sales values for each product. Our formula for chocolate
éclairs, for example, will look like =SUM(Jan:May!J6). This will tell Excel to add up cell J6 for all worksheets in the workbook
between the Jan and May worksheets (inclusive).
 EXERCISES

In the file [Link] determine the total sales of each product during the months February through April.

Three-Dimensional Formula Exercise Solutions

Using the Excel Table Feature

THE TABLE FEATURE

Please download the file [Link].

In this section we will discuss Excel's Table feature. Most of the time when we start developing a spreadsheet, we enter data with
each row representing data. For example, we might enter sales of each product in a different row. Then we usually add new data
to the bottom of the spreadsheet and perhaps add formulas to the right of our data to analyze the data. Usually we have to
scramble and manually change our formulas or graphs to include the new data. We may also choose to extend the formatting
used for the original data to the new data.

Excel's Table feature makes it a snap to add new rows of data or formulas to a spreadsheet. The Table feature ensures that, when
we add new data or new formulas, our old formulas and graphs will automatically update to include the new data. Our old
formatting will also be automatically extended to our new data.

At any time you can select a range of cells, and by hitting Control + T you will make that range of cells a table.

CREATE A TABLE FROM A DATASET

To illustrate the use of the table feature, consider the worksheet data which gives the revenue from each of Le Napoleon's
products. Let's make this data a table and create a formula that adds up total revenue.

ADD A NEW ROW OF DATA TO THE TABLE

Now, let's add a new row of data to the table and show that our total revenue automatically updates to include the new data.

ADD A NEW COLUMN TO THE TABLE

Now, let's see what happens to a table when we add a formula to the table. In column H of sheet new formula we will use the
rank function to determine the ranking of each product's sales.

IMPLICATIONS FOR CHARTING

In worksheet Original graph we graph monthly sales at Le Napoleon. With this setup, adding new data will not cause the new
data to be included in the graph. Then in worksheet Graph new Data we will show how to graph the data so that new data will
automatically be included in the graph.

Note that if we add more data to the bottom of the spreadsheet, the new data will not show up on our graph. Let's solve that
problem!

CREATE A CHART BASED ON A TABLE

Associating a table with our data before we create the graph ensures that new data added to the bottom of the spreadsheet will
automatically be included in the graph.

If you are going to use part of a spreadsheet as source data for a pivot table, you should make the data a table. Then when you
refresh the data, the pivot table calculations will reflect the new data.

EXERCISES

In the file [Link] determine the total sales of each product during the months February through April.
Please download file [Link]. Worksheet Lookup of file [Link] contains sales of several products. Enter a
formula in cell H12 that will compute sales for any product. The formula should work if new products are added to the
 product list.
Create a pie chart to summarize this sales data. The pie chart should update automatically if new product data is entered
into the worksheet.
Worksheet NPV of file [Link] contains a set of cash flows and the dates of the cash flows. Write a formula that
determines the NPV of these cash flows as of April 1, 2009. Assume an annual discount rate of 10%. Your formula should
work if new cash flows are entered into the spreadsheet.

Excel Table Feature Exercise Solutions

Circular References

WHAT IS A CIRCULAR REFERENCE?

A worksheet exhibits a circular reference(s) when the dependence of cells in a spreadsheet exhibits a "looping" relationship. For
example, as shown below the value of cell E8 is needed to determine the value of cell E9, the value of cell E9 is needed to
determine the value in cell E10 and the value in cell E10 is needed to determine the value in cell E8.

Thus in this example, the spreadsheet exhibits a form of circular logic in that the value in cell E8 refers back to its own value.
Circular references often result when you are building a multiple period accounting Income Statement (called a pro forma) in
which a company is allowed to borrow money. Then the amount borrowed is often computed to make assets and liabilities equal.
This creates a circular reference because Debt affects cash, while cash affects total asset value, and total asset value affects debt.

RESOLVING CIRCULAR REFERENCES

It is easy to have Excel resolve circular references. Simply click File, then Options, and choose Formulas. Then simply check
Enable Iterative Calculation and your circular references will be automatically resolved! This setting will be saved when you save
the workbook. Let's now look at a simple example of how circular references can be useful in solving business problems.

AN EXAMPLE OF CIRCULAR REFERENCES

Please download the file [Link]. Le Napoleon has earned $2,000,000 in revenues this year and has incurred $1,200,000
in operating costs. Profits are taxed at 40%. Le Napoleon wants to share their success with the community by giving back 10% of
their after tax profits to the Red Cross and Girl Scouts. How much money should they give to charity?
 HOW DID EXCEL RESOLVE THE CIRCULAR REFERENCES?

When we set up our spreadsheet we created the following relationships:

(Cell E8 value) = .1*(Cell E10 value)

(Cell E9 value) = Revenue - Costs - (Cell E8 value)

(Cell E10 Value) = .4*(Cell E9 value).

When we check Enable iterative calculation, Excel keeps changing (the technical term is Gauss Seidel Iteration!) the values in cells
E8:E10 until all three equations shown above are satisfied.

EXERCISES

Suppose baker John Paul Valjean earns $50,000 in taxable income. The state income tax rate is 8% and the Federal income tax rate
is 25%. The Federal tax rate applies to Taxable income less state income while the state tax rate applies to taxable income less
state tax paid. How much will our baker pay in state and federal income taxes?

Circular Reference Exercise Solution

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