Using Excel for Business Analysis. Fairhurst Danielle Stein

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СКАЧАТЬ In fact, this is the default option when you install Office 2010, even if you are running the 64-bit edition of Windows. It is also important to note that 64-bit computers can still use 32-bit-based software programs, even when the Windows operating system is a 64-bit version.

      1. To check whether your computer is 32-bit or 64-bit capable, go to the Start button, and right-hand click on Computer or My Computer, select Properties, and look for system type. If you’re using Windows 8 and you don’t have a Start button, go to the Control Panel and search for System. On the system tab you’ll be able to see either “x32-based processor” or “x64-based processor.”

      2. If you’re running Windows XP, you’re probably on a 32-bit operating system, but on other versions, it’s anyone’s guess. Go to the Control Panel, and choose “System.” In the section where it explains basic information about your computer, it should say “System Type” and you’ll be able to see whether it is 32-bit or 64-bit. By the way, it’s important to know which version you’re running when you install device drivers for your hardware.

      3. Last, to check if your version of Excel is 32-bit or 64-bit, if you’re using the latest, Excel 2013, click on the File button, go to Account, and then About Excel. A dialog box will appear with either 32-bit or 64-bit at the top of the screen.

      If you’re using Excel 2010, click on the File button, and then Help. About Excel will appear on the right-hand side and underneath it will state the version and whether it is 32-bit or 64-bit.

       What to Beware of before Installing the 64-Bit Version

      You have established that you have a 64-bit-capable computer. This doesn’t mean you necessarily should instantly install the 64-bit operating system and Office software! Bigger is better, right? Hold on a minute. While 64-bit does improve the capacity of the file size, there are some limitations with the 64-bit, mainly due to its nascence. Despite the fact that it has been around for at least two versions (Office 2010 and 2013), it’s still a relatively new introduction, and as such many add-ins and other pieces of software don’t work well with the 64-bit version of Office.

      The 64-bit Excel is a little more stable, but if you are sticking to fairly standard Excel functionality, the switch from 32-bit to 64-bit will probably not impact you; in fact, you probably won’t even notice the increased capacity. For Power Pivot users, though, the additional amount of RAM that 64-bit can access might well come in handy, especially if you are regularly working with data models that contain over a million rows.

      However, if you need to use advanced features with add-ons like ActiveX, VBA codes from an older Excel version or other third-party add-ons, you could encounter all sorts of problems. This is because many Excel add-ons are 32-bit versions that are not fully compatible with the 64-bit Excel. Of course, if you upgrade to 64-bit Excel, then you’ll need to upgrade for the rest of Office, and you may encounter similar problems with add-ins for these products as well. Users have particularly complained about add-ins for Outlook, such as not syncing with mobile phones or other devices.

      Microsoft has a newer version of VBA called VBA 7, which comes in 32-bit and 64-bit formats that are compatible with both Excel versions. For ActiveX controls and other third-party add-ons, you need to either edit the source code (if you can access it) for 64-bit compatibility or look for an alternative or upgrade.

      Last, if you are planning to build a solution or a tool using 64-bit Excel, you need to ensure that your solution will work on both 32-bit and 64-bit Excel. Given that 64-bit Excel is still not as prevalent as 32-bit, building a 64-bit compatible solution could be detrimental to its popular adoption or usage.

      In summary, if you are looking at moving to 64-bit Excel, you need to evaluate how you use Excel. Unless you are a data-hungry Power Pivot user with the need to generate Excel files bigger than 2GB, there is no real value in making the switch. The 32-bit Excel versions can and will continue to meet your needs until the 64-bit solution becomes the norm.

      WHAT SKILLS DO YOU NEED TO BE A GOOD FINANCIAL MODELLER?

      When you decide your financial models are not as good as they should be, should you immediately take an advanced Excel course? Whilst this is helpful, there’s a great deal more to financial modelling than being good at Excel!

      When considering the skills that make up a good financial modeller, we need to differentiate between conceptual modelling, which is to have an understanding of the transaction, business, or product being modelled, and spreadsheet engineering, which is the representation of that conceptual model in a spreadsheet. Spreadsheet skills are reasonably easy to find, but a modeller who can understand the concept of the purpose of the model and translate it into a clear, concise, and well-structured model is much rarer.

      People who need to build a financial model sometimes think they need to become either an Excel super-user or an accounting pro who knows every in and out of accounting rules. I’d argue you need a blend of both, as well as a number of other skills, including some business common sense!

       Spreadsheet and Technical Excel Skills

      It’s very easy for financial modellers to get bogged down in the technical Excel aspects of their model, get carried away with complex formulas, and not focus on key high-level, best-practice procedures, such as error-checking strategies and model stress-testing.

      Excel is an incredibly powerful tool, and almost no single Excel user will have the need or desire to utilise most of the functionality this program offers. As with most software, the 80/20 rule applies: 80 percent of users use only 20 percent of the features – although some would argue that 95 percent of Excel users use only 5 percent of the features! Still, there are those select few who understand every in and out of Excel, every single function, and work out how to do practically anything in Excel. Do you need to have this level of Excel skill to become a good financial modeller? Unfortunately, having great software skills doesn’t always help when it comes to applying them to a specific area of business. Realise that Excel is used in several capacities, so being an Excel super-user doesn’t automatically mean you’ll be a super financial modeller. The best financial models are clear, well structured, flexible, and dynamic; they are not always the biggest and most complicated models that use the most advanced tools and functions! Many of the best financial models use only Excel’s core functionality.

      Having said that, to be a good financial modeller, you do need to know Excel exceptionally well. Those people who maintain that you don’t need good Excel skills to be a financial modeller are usually those with weak Excel skills. You should be building a superb model using simple and straightforward tools because you’ve chosen to make your model clear and easy to follow, not because that’s all you know how to do! You don’t have to be a super-user – the 99th percentile in Excel knowledge – but you must certainly be above average. A complex financial model might use features in Excel that the everyday user doesn’t know. The best financial model will always use the solution that is the simplest tool to complete the task (as simple as possible and as complex as necessary, right?), so the more familiar you are with the tools available in Excel, the easier it will be. An array formula or a macro might be the only way to achieve what you need to achieve, but a simpler solution may well be – and often is – superior. You might also need to take apart someone else’s model, which uses complex tools, and it’s very difficult to manipulate an array formula or a macro if you’ve never seen one before! So, if you are considering a career as a financial modeller (as I assume you are), improving your Excel knowledge is an excellent place to start.

      EXAMPLES OF TECHNICAL EXCEL SKILLS QUESTIONS

      ■ How do I use the appropriate formula? For example, should I use a VLOOKUP or a SUMIF?

      ■ How do I hide a sheet and then protect it so that the СКАЧАТЬ