Microsoft Office Tutorials and References
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Chapter 16: Functions for financial analysis
CHAPTER 16
Functions for financial analysis
Calculating investments ..........................583
Calculating depreciation ..........................590
Analyzing securities ..............................593
Using the Euro Currency Tools add-in...............598
WITH THE financial functions provided with Microsoft Excel, you can perform
common business calculations, such as net present value and future value, without
building long and complex formulas. These functions are the heart of
spreadsheets—the word spreadsheet itself refers to the seemingly antiquated system of using
special grid paper to track financial information. Functions have taken the place of the old
10-key calculator sequences ( algorithms ) used by accounting professionals before
computers revolutionized the discipline.
The financial functions built into Excel fall into three major categories: investments,
depreciation, and securities. The functions included within each category accept similar arguments.
To streamline this chapter, we first define the common arguments and then discuss their
implementation in the individual functions. Excel offers more than 50 financial functions,
and in this chapter we touch on most of them, with special emphasis on those most often
used, needed, or misunderstood. For complete information about all the built-in functions
that Excel has to offer, you can use the onscreen tools covered in “Using the built-in
function reference in Excel” in Chapter 13, “Using functions.”
Calculating investments
The functions we discuss in this section are used when working with cash lows. All of the
functions for calculating investments are available on the Formulas tab, in the Function
Library group’s Financial drop-down list.
Table 16-1 lists the arguments used in functions dedicated to calculating investments.
583
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