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How to use Microsoft Excel as a finance tool – part 2

This time I will look a bit more in depth on how to use Microsoft Excel for financial calculations.

Picture of Excel icon with text about how to use Microsoft Excel in finance

How can I use Excel to get the best out of my data?

Chances are that you are going to have to look into the data that you have entered again in a year or two years.

So how do I organize a spreadsheet so that I can see what I’ve done when I come back?

Excel is a very powerful tool once you know how to use it.

The secret is called labeling and with that I mean to properly label all the cells in order to easily be able to go back and change.

But to start off this chapter I will discuss  some financial metrics and why they are important.

So why is it an exciting time to study finance?

The reason is that we had a financial crisis in 2009 and still to this day we are seeing the repercussions of that meltdown.

We all got into a lot of trouble and the financial institutions that we depend on for our daily lives lost a lot of money.

Some of the questions that people are asking themselves in the aftermath of the financial crisis are:

  1. Can markets really allocate resources efficiently?
  2. Are markets efficient?
  3. Are people always acting rationallly?

These are questions that people in finance and economics assumed they had the answer to for years, but now they are getting more cautious.

What I will be talking about in this chapter is:

  1. The reason why the corporation is an efficient business form.
  2. The structure of a corporation.
  3. The fundamental accounting equation: Assets = Liabilities + Equity.
  4. Define what finance is.
  5. The goal of financial management.
  6. Why we are studying finance.
  7. What the key questions in finance are.
  8. Define financial markets (primary and sceondary) and why they are important.
  9. What is the importance of cash flow.

The first part in using Microsoft Excel as a finance tool can be found here.

The post How to use Microsoft Excel as a finance tool – part 2 appeared first on LJ Nissen's blog.

This post first appeared on LJ Nissen Investments, please read the originial post: here

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How to use Microsoft Excel as a finance tool – part 2


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