Microsoft Office Tutorials and References

In Depth Information

Exhibit 1.2
Julia’s initial workbook

Exhibit 1.3
Julia’s initial workbook with cell formulas

Her calculation of
Cost of Goods Sold Expense
(COGS) is not quite as simple

to determine. There are two equally possible percentages, 40 or 80%, that can be

multiplied times the
Sales Revenue
to determine COGS. Rather than select one, she

has decided to use a percentage value that is at the midpoint of the range, 60%. Thus,

she has made some assumptions in her calculations that may need explanation to the

client, yet there is no documentation of her reasons for this or any other assumption.

Additionally, in Exhibit 1.3 the inﬂexibility of the workbook is apparent—all

parameters and variables are imbedded in the workbook formulas; thus, if Julia

wants to make changes to these assumed values, it will be difﬁcult to undertake.

To make these changes quickly and accurately, it would be wiser to place these

parameters in a central location—in a
Brain
—and have the cell formulas refer to

this location. It is quite conceivable that the client will want to ask some
what-if

questions about her analysis. For example, what if the unit price range is changed

from 4, 5 and 6 dollars to 3, 4, and 5 dollars; what if the most likely
Sales Volume

Search JabSto ::

Custom Search