In the text (mainly in the time value of money chapter and the capital budgeting chapter) we have covered how to use Excel instead of a financial calculator. In this brief appendix, we provide some of the key skills for anyone who wants to conduct financial analysis in Excel. Many of these skills can apply to any use of Excel, not just specifically finance. The formatting shortcuts and data manipulation are just as important as the financial functions. To quote one of our coauthor's prior students who took a prestigious rookie finance job after graduation, "Thanks for all of the Excel training. I can manipulate and organize the data so much faster than my cohorts that I spend 25% of the time organizing the data and 75% of the time analyzing it. This compares to my cohorts who spend 75% of the time organizing their data and only 25% analyzing it." Now, who do you think is providing the better analysis!
If you feel any of the following tools will be helpful and you cannot figure them out quickly with the descriptions given, hit the F1 key and search Excel Help for help. Most professionals and students who use Excel quickly figure out that F1 is their best friend! A close second-best friend is the fx (function) key found on the far left of the Formula bar. If you click the fx key, you will see dozens of functions pre-programmed in Excel such as NPV and IRR. The functions are not limited to financial applications—you'll find many other types of statistical and programming functions.