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CHAPTER 1
Spreadsheet Basics
The term spreadsheet covers a wide variety of elements useful for quantitative
analysis of all kinds. Essentially, a spreadsheet is a simple tool consisting of a
matrix of cells that can store numbers, text, or formulas. The spreadsheets power
comes from its ability to recalculate results as you change the contents of other
cells. No longer does the user need to do these calculations by hand or on a
calculator. Instead, with a properly constructed spreadsheet, changing a single
number (say, a sales forecast) can result in literally thousands of automatic changes
in the model. The freedom and productivity enhancement provided by modern
spreadsheets presents an unparalleled opportunity for learning financial analysis.
After studying this chapter, you should be able to:
1. Explain the basic purpose of a spreadsheet program.
2.
Identify the various components of the Excel screen.
3. Navigate the Excel worksheet (entering, correcting, and moving data
within the worksheet).
4. Explain the purpose and usage of Excels built-in functions and macro
functions.
5. Create graphics and know how to print and save files in Excel.
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CHAPTER 1: Spreadsheet Basics
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Spreadsheet Uses
Spreadsheets today contain built-in analytical capabilities previously unavailable in
a single package. Users often had to learn a variety of specialized software
packages to do any relatively complex analysis. With the newest versions of
Microsoft Excel, users can perform tasks ranging from the routine maintenance of
financial statements to multivariate regression analysis to Monte Carlo simulations
of various hedging strategies.
It is literally impossible to enumerate all of the possible applications for
spreadsheets. You should keep in mind that spreadsheets are useful not only for
financial analysis, but for any type of quantitative analysis whether your specialty
is in marketin