Bad & Good

Formula Writing Techniques

Contents:

4th Quarter - Bad Version

Bad Formulas Displayed
Good Version
Good Formulas Displayed

A simple worksheet displays the danger of

using actual values in Excel formulas and
how to correct this critical design flaw.
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Current Projected
Revenue
Internet Access Subscriptions 35,000 1,750.00
E-mail & Bulletin Board Service 4,500 225
Web Page Disk Space Rental 1,000 50
Monthly Revenues $81,000 $2,025.00

Expenses
Salaries 100,200 5,210.40
Rent 3,000 156
Equipment Maintenance 5,820 302.64
Advertising 3,560 185.12
Operating Costs 8,000 416
Monthly Expenses $120,580 $6,270.16

Profit $(39,580.00) $(4,245.16)

Poorly-written formulas
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Projected Problems:
October
Revenue 5% is entered into each formula.
Internet Access Subscriptions1,750.00 If the value changes, each formula
E-mail & Bulletin Board Service 225 must be changed manually.
Web Page Disk Space Rental 50
Monthly Revenues $2,025.00
SUM formulas list the values to
Expenses sum. If the values change, each
Salaries 5,210.40 SUM formula must be changed
Rent 156 manually.
Equipment Maintenance 302.64
Advertising 185.12 Solutions:
Operating Costs 416
Monthly Expenses 6270.16 Put the projection values in one place
in the spreadsheet. Refer to those
Profit $(4,245.16) values' cells in formulas.

In SUM formulas, use cell references,

not actual values.
 Revenue projection index v
Current Projected Expense projection index va
Revenue
Internet Access Subscriptions 35,000 1,750
E-mail & Bulletin Board Service 4,500 225
Web Page Disk Space Rental 1,000 50
Monthly Revenues $40,500 $2,025

Expenses
Salaries 100,200 5,210.40
Rent 3,000 156
Equipment Maintenance 5,820 302.64
Advertising 3,560 185.12
Operating Costs 8,000 416
Monthly Expenses $120,580 $6,270

Profit $(80,080.00) $(4,245.16)

Correctly-written formulas
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Revenue projection index value: 5%
Expense projection index value: 5.20%
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Revenue projection index
5% value:
Current Projected Expense projection5.20%
index value:
Revenue
Internet Access
35,000Subscriptions
1,750
E-mail & Bulletin
4,500 Board Service
225
Web Page Disk
1,000Space Rental 50
Monthly Revenues ### $2,025

Expenses
Salaries 100,200 5,210.40
Rent 3,000 156
Equipment5,820
Maintenance 302.64
Advertising3,560 185.12
Operating Costs
8,000 416
Monthly Expenses ### $6,270

Profit ### $(4,245.16)

Correctly-written formulas