Using Excel as Your Financial Calculator | The CCIM Institute (2024)

FAQs

Can you use Excel as a financial calculator? ›

Excel formulas and budgeting templates can help you calculate the future value of your debts and investments, making it easier to figure out how long it will take for you to reach your goals. Use the following functions: PMT calculates the payment for a loan based on constant payments and a constant interest rate.

For simple formulas, simply type the equal sign followed by the numeric values that you want to calculate and the math operators that you want to use — the plus sign (+) to add, the minus sign (-) to subtract, the asterisk (*) to multiply, and the forward slash (/) to divide.

The seven financial functions in Excel are PV (Present Value), FV (Future Value), NPV (Net Present Value), IRR (Internal Rate of Return), PMT (Payment), RATE, and NPER (Number of Periods). These functions are specifically perform various financial calculations and analyses.

You can also set up automated tasks so that certain calculations are carried out automatically each time something changes in your plan. Finally, you can use the analytical functions in Excel to crunch data quickly and accurately so you can make better decisions about money matters.

Excel is a popular spreadsheet tool for personal and business use, and for good reason. It's a time-tested, accessible program that can accomplish a wide range of tasks, including financial forecasting and budgeting. Excel is an easy-to-use platform for inputting numbers and getting results with simple formulas.

Excel formulas enable you to perform calculations such as addition, subtraction, multiplication, and division. In addition to these, you can find out averages and calculate percentages in excel for a range of cells, manipulate date and time values, and do a lot more.

Instead of reaching for your calculator, use Excel to do the math! On a sheet, you can enter simple formulas to add, subtract, multiply, and divide two or more numeric values. Once you have created a formula, you can fill it into adjacent cells — no need to create the same formula over and over again.

The Dynamic Nature of Excel

When we type the value into two different cells and then have another cell with the answer we can then easily change the values in the cells and Excel will automatically recalculate the solution for us.

#1 XNPV. The number one formula in Excel for finance professionals has to be XNPV. Any valuation analysis aimed at determining what a company is worth will need to determine the Net Present Value (NPV) of a series of cash flows.

Formula: =XNPV(discount_rate, cash_flows, dates)

For finance professionals, XNPV is the most useful formula in Excel. For a valuation analysis to determine a company's value, a series of cash flows must be calculated to determine its Net Present Value (NPV).

How Excel can be used in finance? ›

Excel is widely used in financial modeling, which involves creating complex financial models to analyze the performance of a business or investment. Financial models can be used to forecast revenue, expenses, and cash flow, as well as to evaluate the potential returns and risks of an investment.

At a minimum, break it down into three sections: (a) inputs/drivers, (b) calculations, (the actual model, which will illustrate the projected financial statements), and (c) outputs. Finally, build the model and take the time to format it for a clean, consistent, professional finish.

Key Takeaways. Microsoft Excel is a spreadsheet application used to manipulate stored data. Finance and accounting professionals choose Excel for its complex analytical and computing features. Microsoft Excel enables users to identify trends and organize and sort data into meaningful categories.

Financial modeling goes beyond simple calculations. To effectively build financial models, you must become proficient in advanced Excel functions. These functions enhance your ability to: Perform complex data analysis, such as using functions like VLOOKUP and HLOOKUP to retrieve specific data points with precision.

Track all your finances in one place, customize your workbook, and receive personalized tips without ever leaving Excel. Note: Money in Excel is a premium template that is available as part of the Microsoft 365 Personal or Family subscription.

Financial Calculator A calculator with a variety of functions for performing financial calculations, such as determining the monthly payments on a loan or the price of an item after tax has been applied. Individual rates can be set for markup, discount, tax and interest.

Yes, Excel can also be set up to generate full-blown financial statements using true double-entry accounting methods.