Microsoft Excel 2007 Module II

March 2010

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009
About The Kadmos Initiative Pvt Ltd.

Founded in 2009 by Isfandiyar Shaheen, The Kadmos Initiative (Pvt) Ltd. is a hybrid financial advisory and learning company
which provides financial modeling and valuation training courses. Serving financial institutions, corporations entrepreneurs
and students, TKIs goal is to demonstrate the application of finance theory by combining hands-on instruction with practical
examples and live deal simulations.

TKIs extensive list of career partners provide networking opportunities to job seekers, existing finance professionals and
potential MBA candidates. Entrepreneurs are provided with a platform through which they can turn an idea into a venture; by
teaming with TKI, entrepreneurs can learn the tools required to prepare a marketable business plan. TKI also offers exciting
career opportunities, and will give preference to applicants who have successfully completed our training modules.

For more information, please visit our website at www.kadmosinitiative.com

Isfandiyar Shaheen (Asfi) Instructor

Isfandiyar Shaheen (Asfi) is the founder and Chief Executive Officer of The Kadmos Initiative Pvt Ltd. Prior to establishing
TKI, Asfi was an investment banker at Seabury Aviation & Aerospace. At Seabury, Asfi has participated in M&A advisory,
financial restructuring and privatization assignments. Asfi has extensive experience with financial modeling, valuation and
business plan implementation. Prior to joining Seabury, Asfi was an Analyst at Analysis Group, where his primary
responsibilities included developing valuation models for commercial litigation cases.

Asfi graduated from Franklin and Marshall College (cum laude) with degrees in Economics (Honors) and Mathematics and is
Series 7 & 63 qualified.

Seabury Aviation & Aerospace is the leading independent transportation-focused investment banking and advisory firm
serving aviation, aerospace, cargo and maritime on a global basis. The company's professionals have advised over 225
clients worldwide in the airline, aerospace, cargo/logistics and maritime sectors.

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 1
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Custom Views and Scenario Manager

7. Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 2
MS Excel Module II

Pre-requisite: MS Excel Module I

Advanced features covered include:

- Names
- Statistical and Embedded IF Statements
- Nested Lookups
- Goal Seeker and Solver Add-in
- Macros and Macro Recorder

Reasonable level of Excel proficiency is assumed, including familiarity with using

keyboard shortcuts

Module will be taught at a significantly faster pace

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 3
MS Excel 2007 Menus

The MS Excel 2007 interface utilizes Tabs, a Title Bar and the Office Button as
opposed to drop-down menus featured in MS Excel 2003

The Office Button Tabs Title Bar

Similar to the File drop-down menu MS Excel 2007 has re-categorized Title Bar indicates file name and
Features present: features in Tabs also allows the user to easily
New Spreadsheet The Home tab consists of customize a Quick Access
Open, Save, Save As most commonly used feature
Print, Print Set Up features Any commonly used Excel
Prepare, Send, Publish Page Lay-out tab is a useful Function can be placed
addition and effectively here depending on user
functions as Print Set-up preference

Excel 2007 also features a Quick Access view bar with zoom / preview options

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 4
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Custom Views and Scenario Manager

7. Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 5
Defining and Using Names

Excel allows the user to Name a range of cells

This is particularly useful as an auditing tool because users may tend to forget
formula logic
Defined Names group can be accessed under the Formulas Tab

Naming cells should be used judiciously as too many Defined Names have a
tendency to corrupt a work book
Avoid naming ranges, and stick with naming individual cells where required

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 6
Defining and Using Names: Exercise

This exercise will explore Defined Names

Step 1: Go to cells I21:L21 and observe the
existing formula
Step 2: Now go to cell L11 (this is indicating
the inflation rate for Landing Charges per ton),
click on Define Name
Step 3: Here you can Name the cell, call it
Landing_Chgs_Inflation
Step 4: Now when you try to type in a formula
(in Excel 07 only) using
Landing_Chgs_Inflation, the formula bar will
show the defined name
Step 5: To update calculation in Row 21 with
the newly defined Name, select cells I21:L21,
click on Apply Names, and in the list choose
the appropriate name
Step 6: Attempt to incorporate Names in other
cells present on Spreadsheet

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 7
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Custom Views and Scenario Manager

7. Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 8
Nested Logical Functions

There are infinite iterations of how nested functions can be used on conjunction
with one another

This section will cover a few particularly useful features which utilize nested
functions:
- Drop down lists using nested IF statements
- Performance Analysis using nested IF and statistical functions

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 9
Developing Scenarios

Objective: Develop a Base Case, Downside Case and Upside Case, and insert
drop down menus which allows the user to toggle between each
Step 1: Open the Scenarios Exercise.xls file
Step 2: Create a Copy of the Control Page, and name this tab Scenarios
Step 3: In Scenarios, specify set of inputs (The Blue Text!) which would result
depending on scenario type
Step 4: Now, create a list with Base, Upside and Downside, using Data
Validation
Step 5: Once list is created, use embedded IF statements to update each input
and make it correspond with relevant scenario

Note: Exact syntax has been consciously left out

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 10
Performance Analysis

Objective: Arrival time of four employees has been given, convert numbers to a
Time format, and using average arrival time determine which employee is
Punctual, Late or Very Late
Step 1: Convert numbers into a Time format, using TIME, LEFT and RIGHT
functions
Step 2: Calculate Average arrival time for employees
Step 3: Depending on Average arrival time, categorize each employee as
Punctual, Late or Very Late using embedded IF and AND statements

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 11
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Custom Views and Scenario Manager

7. Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 12
Nested Lookups

One of the limitations of the horizontal and vertical LOOKUP functions is that for
every lookup value changed, the column or row index number stays constant
HLOOKUP will search for any amount, but always for the same time row
number. Conversely, the VLOOKUP will search for any time period, but always
for the column number
There is, however, a technique whereby one LOOKUP function is "nested" within
another. This looks up one value, which will then be used in a second LOOKUP
formula as a column or row index number. Using this technique allows you to,
say, enter a time period and an amount and see the correct interest rate.
Because nested LOOKUPs have more than one lookup value, more than one
array is needed. This second array should consist of the column or row numbers
to be used in the LOOKUP formula

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 13
Nested Lookups Exercise

Open the Nested Lookups Exercise file

Objective: Replace the row reference number with a VLOOKUP
Step 1: In Financial Statements tab, create Lookup reference numbers in column
L
Step 2: Use these reference numbers in a VLOOKUP function to achieve total
automation on the Control Page
Step 3: Is there any room for an ISERROR function?

Discussion: Being judicious with automation!

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 14
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Custom Views and Scenario Manager

7. Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 15
Goal Seeking

The Goal Seek command is used to bring one formula to a specific value

It does this by changing one of the cells that is referenced by the formula. Goal
Seek asks for a cell reference that contains a formula (the Set cell)

It also asks for a value, which is the figure you want the cell to equal

Finally, Goal Seek asks for a cell to alter in order to take the Set cell to the
required value

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 16
Goal Seeking: Exercise

Objective: Set 2011 and 2012 EBITDA at Rs. 80 MM and 90 MM respectively, by

changing the number of 747 aircraft movements
Step 1: Access Goal Seek under the Data Tab, and click on What If Analysis to
open the Goal Seek Window

Step 2: Specify which cell to change to what value

Step 3: Identify the input (BLUE cell) which you would like to change to achieve
desired result

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 17
 The Solver

The Solver platform operates on the Linear Optimization idea

There is an objective function which is either minimized or maximized based on
a set of constraints
To access the Solver, go to the Data tab
Type of optimization Target function
Max Contribution

Options
Variables Dont forget to set
Units of Products Assume Nonnegative

Constraints
Capacity

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 18
 Solver Options

Time until the

solver stops
Controls the precision of
solutions by using the number
you enter to determine
Number of whether the value of a
iterations to constraint cell meets a target
find optimum or satisfies a lower or upper
bound

If the new solution

is only X% higher When the relative change in
than the original one the target cell value is less
solver stops than the number in the
Convergence box for the last
Do not activate that five iterations, Solver stops
button, solver will find
optimal solution for
linear problems

Variables have to
remain positive

Keep default settings

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 19
The Solver: Exercise 1 Linear Optimization

Example: Rinker is looking to optimize its distribution strategy to the six markets through
its four sources
Florida Cement Markets and
Rinkers Sources of Cement

Jacksonville and
Panhandle North Florida

Port Canaveral
Orlando and
Central Florida
Brooksville

Tampa-
St. Petersburg

Key Questions Southeast

Southwest Florida
What is the objective? Florida
Port Everglades

What are the decisions?

Miami

What are the constraints?

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 20
Minimize Cost of Production and Transportation Linear Optimization

Objective
Minimize Production The model should be designed to minimize production and transportation costs
and Transportation
Costs - This ultimately maximizes the net present value of Rinkers Florida cement
business

Decisions
The model should decide how much cement is sourced from each of the four
Production Quantity sourcing locations

Shipping Routes
The model should determine the lowest cost transportation schedule to meet
demand

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 21
Lowest Cost Source + Cheapest Route Linear Optimization

Cost of Production
Cost of Production

Miami Plant $39.19

Brooksville Plant $29.24

Port Canaveral $60.00

Port Everglades $60.00

Least expensive source of production

Cost of Transportation
Jacksonville and Tampa- Orlando and
Panhandle Southwest Florida Southeast Florida
North Florida St. Petersburg Central Florida
Miami Plant $55.00 $34.75 $26.72 $23.86 $15.57 $5.96

Brooksville Plant $31.06 $13.84 $7.92 $12.56 $20.85 $28.39

Port Canaveral $42.63 $19.37 $16.00 $8.57 $24.04 $18.45

Port Everglades $55.00 $34.75 $26.72 $23.86 $15.57 $5.96

Least expensive source(s) for trucking delivery to given region

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 22
Constraints! Linear Optimization

Max Capacity
Constraints on factory capacity Miami 1,000 KST
Constrained by
ensure that cement is realistically Brooksville 800 KST
Factory Capacity
sourced through options available Port Everglades 1,100 KST
to Rinker in a given year
Port Canaveral 1,200 KST

Expected Demand
Panhandle 60 KST
Constraints on the volume of N. Florida 267 KST
Constrained by cement supplied to a given region W. Central Florida 592 KST
Regional Demand ensure that cement is distributed to E. Central Florida 1,080 KST
areas of the state that demand the
S. West Florida 508 KST
cement
S. East Florida 1,401 KST

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 23
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Scenario Manager

7. Macros and Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 24
Scenario Manager

Scenario Manager offers an alternate way of displaying different assumptions

The tool offers a great way for the user to return to default settings or assumptions
for any given model
Scenario Manager can be accessed from the Data Tab, under What If analysis
Clicking on the Add screen shows the inputs required for defining a Scenario

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 25
Scenario Manager: Exercise

Objective: Develop different scenarios using Scenario Manager

Step 1: Open Scenario Manager and click on Add Scenario
Step 2: Name Scenario and identify cell range which you would like to change,
and click OK
Step 3: Input cell values where required

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 26
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Scenario Manager

7. Macros and Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 27
Macros and the Developer Tab

To access Macros, first the Developer Tab has to be enabled from Excel Options
in the Office Button

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 28
Macro Recorder: Exercise

Objective: Insert a button on the Title page of

Excel Module II workbook to access a
different tab using Macro Recorder
Step 1: Go to Title Page, from the Developer
Tab, access the Insert menu under the
Controls group and choose Button (from
control)
Step 2: Click on Record in the Assign Macro
screen and click OK again
Step 3: Perform the action required, in this
case access the Goal Seek Tab (or any other
tab)
Step 4: Once action is performed, click on
Stop Recording under the Code Group

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 29
Drop Down Macros: Exercise

Objective: Explore the functionality of each

drop down macro, found in the Insert section
of the Controls group
Step 1: Select each Control type under Form
Controls and paste it in the worksheet
Step 2: Right click on the pasted buttons or
lists and click on Format Controls
Step 3: Under Format Controls you can
specify where to access the list and
corresponding cell which will indicate a
numerical output
Step 4: Such a numerical output can be used
in conjunction with embedded IF statements
to make user friendly spreadsheets

Now, attempt to utilize up to three of these

functions, aim is to understand the logic
involved in incorporating such macros

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 30
Table of Contents

1. Overview of MS Excel Module II

2. Defining and Using Names

3. Nested Logical Functions

4. Nested LOOKUPs

5. Goal Seeker and Solver

6. Scenario Manager

7. Macros and Macro Recorder

8. Group Exercises

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 31
Running Finance Facility Optimization

Objective: Based on a minimum cash balance requirement, program a Running

Finance Facility
The solution already exists, we will explore the formula development as a group
and input macros required to make this spreadsheet more user friendly

Confidential not for third party distribution The Kadmos Initiative (Pvt) Ltd. 2009 32