Advanced formula construction

L E S S O N 2 Advanced formula construction Lesson objectives Suggested teaching time 40-50 minutes To become more adept at using formulas to get the data you want out of Excel, you will: a b c d Use range names to make your formulas more powerful and flexible. Use the IF function to create a formula that returns different results under different conditions. Use the VLOOKUP function to create a formula that picks a return value from a range of values depending upon an input value. Use Excel s error-handling and auditing features to correct errors and to better understand the structure of your worksheets. 2-1

Excel 2000: Advanced a Using names Names A name is a description that you assign to a cell or a group of cells. Names are an alternative to cell references. Once a name has been defined, you can refer to it in a formula; for example, in the formula =SUM(Year1), Year1 is the name given to a group of cells. You can use names to move quickly to a certain area of the workbook or to specify print ranges. Names should follow these guidelines: The first character must be text or an underscore character. The remaining characters can be text, numbers, periods, and the underscore character. Names can consist of up to 255 characters. A name cannot contain spaces. You can use lowercase and uppercase letters in names; however, Excel does not distinguish between uppercase and lowercase letters when using names. Spend a few minutes going over the structure of this worksheet with students. Point out that the bonuses are based upon the bonus table. Also call their attention to the box containing the commission rate and quota. Jaen is a common Spanish name pronounced Hine. This is a simple example of the use of names. When students first display the Define Name dialog box, they might be confused by seeing Commission_Rate in the Name box and Comm_Rate in the Names In Workbook list. Explain that Excel is assuming you want to use the text in the cell adjacent to the active cell ( Commission Rate in cell E6) to define a new name in the sheet. Comm_Rate has already been Task A-1: Observing named ranges q Objective: To observe how a named range can simplify a formula. 1. Open Chocolate Sales This worksheet shows the sales for an international chocolate distributor for a three-month period. The sheet shows totals, commissions, and bonuses for each sales representative. 2. Select and observe cell F6 3. In the Name Box drop-down list, select Comm_Rate 4. Choose _Insert Name Define _ 5. In the Names In Workbook list, select Comm_Rate and then observe the Refers To box The formula uses the name Comm_Rate instead of a number or a cell reference. (The Name Box is on the far-left side of the formula bar.) The name Comm_Rate refers to cell J3, which contains the commission rate, 18%. To display the Define Name dialog box. Here you can see the names that have been defined in the workbook, or define your own names. The name refers to cell J3 in Sheet1, the cell containing the commission rate. 6. Click on Close To close the Define Name dialog box. 2-2

Lesson 2: Advanced formula construction Defining names To define a name, select the cell or range of cells that you want to name, click in the Name box, and enter the name. (You can also name a cell or range of cells by using the Insert, Name, Define command.) You can choose to define a value to a name. For example, you might want to apply a name to a commission rate value of 15 percent. To do this, use the Insert, Name, Define command and enter the value in the Refers To text box. Task A-2: Defining names q Objective: To define a name to refer to the cell containing the quota, so that the name can be used in formulas you will construct later. 1. Select cell J4 This is the cell containing the quota figure. Notice that cell I4 contains the text Quota. 2. Choose _Insert Name Define _ To display the Define Name dialog box. Excel guesses that you want to name the selected cell, J4, Quota. 3. Click on OK To define the name Quota. Tip: Tell students that they also can define a name by selecting a cell or range, and then typing a name directly in the Name box. In the current example, it made sense to use the menu because Excel automatically used the label text, Quota, to create the name. 4. Observe the Name box The name Quota refers to the active cell, J4. 5. Select the range I8:J10 Do not select the labels in row 7. 6. Click in the Name Box Type Bonus Press R 7. Save the workbook as My Chocolate Sales Naming cells by using existing row and column labels You may have labels in your worksheet that you want to use as names for your cells or ranges of cells in that worksheet. You can save time and typing by using the Insert, Name, Create command to do this. 2-3

Excel 2000: Advanced Task A-3: Naming a cell by using existing row and column labels q Objective: To create names to apply to the raw sales data for each sales representative. 1. Select the range A6:D10 Excel can automatically create many names at once based on labels in a row or column. You start by selecting both the data to be named and the row or column containing the labels. 2. Choose _Insert Name Create _ To display the Create Names dialog box. Excel assumes, correctly, that you want to use the labels in the leftmost column of the range as names for the data in the corresponding rows. 3. Click on OK To close the dialog box and create the names. 4. From the Name Box dropdown list, select Hanover Select Monder from the Name Box The name refers to the range B6:D6, the raw data for Hanover. This name refers to the range B7:D7. The Create Names command created named ranges for all the representatives. 5. Display the Define Name dialog box Select each name and observe the range to which it refers (Choose Insert, Name, Define.) 6. Close the Define Name dialog box 7. Select the range E6:E10 This range contains the total formulas for each representative s sales. You will replace the cell references with names to make the formulas more readable. 2-4

Lesson 2: Advanced formula construction 8. Choose _Insert Name Apply _ To display the Apply Names dialog box. 9. In the Apply Names list, verify that Hanover, Jaen, Monder, Peruzzi, and Simmonds are selected Click on OK 10. Select each cell in the Total column and observe the formula it contains You will apply these names to the formulas in the selected range. To apply the names. The names have replaced the range references. 11. Save the workbook 2-5

Excel 2000: Advanced b Using the IF function The IF function enables you to perform a calculation only if a certain condition is true, and to perform a different calculation if that condition is false. The syntax for the function is: IF(logical_test,value_if_true,value_if_false) Logical_test is any value or expression resulting in TRUE or FALSE. Value_if_true is the value (or formula resulting in a value) that will be returned if logical_test is TRUE. Value_if_false is the value (or formula resulting in a value) that will be returned if logical_test is FALSE. For example, given the following function: IF(A4>5,A4/2,0) If A4=8, then logical_test (A4>5) is TRUE, and the function returns value_if_true (A4/2). If A4=2, then logical_test (A4>5) is FALSE, and the function returns value_if_false (0). The Paste Function command The Paste Function command can help you build functions in your worksheets. When entering complex functions, you increase your accuracy and efficiency by using the Paste Function command. It can help you select a function and assemble the arguments correctly. The formula bar displays your changes as you build your formula. To see more information about a function, select it in the Paste Function dialog box and click on the Help button. Task B-1: Using IF to create a conditional function q Objective: To modify the calculation of commissions to give a commission only to those representatives who meet the sales quota. 1. Observe the Total column Three sales representatives did not meet the quota of $60,000. These people should not receive a commission. Because Excel moves buttons around based on their usage, you might need to help students find this and other buttons. If a button does not appear on the toolbar, use the More Buttons drop-down arrow to find it. 2. Clear the range F6:F10 You will replace the current commission formula with a new one that gives commissions only to those representatives who meet the sales quota. 3. Select cell F6 Click on the Paste Function button You will enter the IF function here. To display the Paste Function dialog box. 2-6

Lesson 2: Advanced formula construction 4. If necessary, hide the Office Assistant 5. In the Function Category list, select Logical The IF function Use this overhead to discuss the structure of the IF function. First show only the top version to show the general form. Then use the middle version to translate the argument text into simpler terms. Show the bottom version to show how the specific IF function in this task should look. Tip: Point out that students can click on cells to enter cell references if they prefer. They will still need to type the rest of the argument. In the Function Name list, select IF 6. At the bottom of the dialog box, observe the structure and explanation of the IF function The IF function has three arguments: the condition to test (logical_test), the action to perform if the condition is true (value_if_true), and the action to perform if the condition is false (value_if_false). 7. Click on OK To display the IF function dialog box. 8. In the Logical_test box, type E6>=Quota 9. In the Value_if_true box, type E6*Comm_Rate 10. In the Value_if_false box, type 0 The condition you want the IF function to test is whether the sales representative s total (in cell E6) is greater than or equal to the quota. If the representative has met quota, the function will calculate the commission by multiplying the sales total by the commission rate. If the representative has not met quota, the function will return a commission of 0. 11. Click on OK To close the dialog box and enter the IF function in cell F6. 12. Copy the formula in cell F6 to the range F7:F10 To duplicate the commission formula for the rest of the sales representatives. Now, only those who have met the quota receive a commission. The dash is displayed instead of a zero because of a custom format applied to that cell. 13. Save the workbook 2-7

Excel 2000: Advanced Using text as the value_if_false argument The value_if_false argument of the IF function can be text. However, the text must be enclosed in quotation marks. Multiple cell editing If you have a range of cells that contain similar formulas that you need to update, you can select the cells, edit the formula in the active cell, press Ctrl + Enter to enter the new formula, and copy the new formula to the selected range. Task B-2: Using IF to return a text value q Objective: To edit the IF function you entered in the last task to return the text Below Q if a sales representative fails to meet quota. M If students happen to press R instead of C+R, instruct them to select the range F6:F10, click in the formula bar, and then press C+R. If students press R, the edited formula will appear in cell F6 only, and not in cells F7, F8, F9, and F10. 1. Select the range F6:F10, if necessary 2. In the formula bar, replace 0 with Below Q Press C+R 3. Observe the worksheet You will edit all these formulas simultaneously. (Be sure to include the quotation marks.) 4. Save the workbook Cells F7, F9, and F10 display the text Below Q. 2-8

Lesson 2: Advanced formula construction c Using the VLOOKUP function Nested functions A function's arguments can be constant values or formulas. When a function's argument is another function, it is called a nested function. You can nest up to seven levels of functions in a formula. Nested IF functions Sometimes you want a formula to make a decision and then perform the appropriate calculation. The IF function enables you to create such formulas. Used alone, an IF function can choose from only two calculations. You can, however, choose to nest IF functions within other IF functions. You are limited to seven levels within a nested function. Earlier in the lesson, you learned the syntax of an IF function: IF(logical_test,value_if_true,value_if_false) Task C-1: Examining nested IF functions q Objective: To understand the shortcomings of using nested IF functions for complex decision-making formulas. 1. Observe the range I6:J10 This range contains a table used to determine sales bonuses. Sales representatives who sell less than $50,000 receive no bonus; those who sell between $50,000 and $68,000 receive $2,000; and those who sell $68,000 or more receive $8,000. You might want to ask students if they can see any potential shortcomings of this formula. One answer would be that it lacks flexibility. Adding a new row to the bonus table, for example, would require you to completely reconstruct the formula. 2. Select cell G6 and observe its formula 3. Select the range I10:J10 From the shortcut menu for the selected range, choose _Insert _ Click on OK This formula translates the bonus table into two nested IF functions. This formula is difficult to construct, modify, and understand. You will insert another row in the bonus table. To display the Insert dialog box. To insert the new row and shift cells down. 2-9

Excel 2000: Advanced 4. In cell I10, enter 60 In cell J10, enter 4 5. Select and examine cell G8 The bonus formula returns the value $2. Because Jaen s total is $62, the bonus amount should be $4. To fix the problem, you would need to nest a third IF function within the formula. % Using a lookup table is like using an income tax table. Use the following example: After you determine your taxable income, you find the income figure or appropriate range in the table and then enter the tax amount on the tax form. Likewise, when you are using a lookup table, the lookup function searches for the matching value or range in the table and enters the specified value in the active cell. The VLOOKUP function The VLOOKUP function finds and returns a value located in a certain row and column of a lookup table. The lookup table contains an orderly arrangement of information. The syntax of the function is: VLOOKUP(lookup_value,table_array,col_index_num,range_lookup) Lookup_value is the value that will be looked for in the first column of the lookup table. It can be a value, reference, or text string. Table_array is a reference to (or name of a reference to) the lookup table. Col_index_num is the column number in the lookup table from which a value should be returned. Range_lookup is an optional argument that specifies whether you require an exact match or an approximate match. If the VLOOKUP function cannot find an exact match for lookup_value, it uses the largest value in the lookup table s first column that still is less than lookup_value. Excel provides several lookup functions. (For more information on the lookup functions, see the Microsoft Excel User's Guide or online Help.) Task C-2: Entering a VLOOKUP function q Objective: To create a bonus formula that will be more flexible than a formula using nested IF functions. MIf students do not clear cell contents before they click on the Paste Function button, Excel will assume they want to edit the existing 1. From the Name box dropdown list, select Bonus 2. Clear the contents of the range G6:G10 This name refers to the range I8:J11, which contains the bonus lookup table. When you create and name lookup tables, they should not include headings. You will use the VLOOKUP function to create the bonus formula. 2-10

Lesson 2: Advanced formula construction 3. Select cell G6 Click on the Paste Function button To display the Paste Function dialog box. 4. In the Function Category list, select Lookup & Reference In the Function Name list, select VLOOKUP The VLOOKUP function First show only the top version of the function to show the general form. Then use the middle version to translate the argument text into simpler terms. Show the bottom version to show how the specific VLOOKUP function in this task should look. Tip: Remind students that they can type or click on a cell to enter a cell reference. 5. At the bottom of the dialog box, observe the structure and explanation of the VLOOKUP function The VLOOKUP function has four arguments: the value to look for; the table in which to look for the value; the column within the lookup table from which to return a value; and an optional argument for specifying that the function only return values that match exactly. 6. Click on OK To display the VLOOKUP function dialog box. 7. In the Lookup_value box, enter E6 In the Table_array box, type Bonus In the Col_index_num box, type 2 The function will look for Hanover s sales total in the lookup table. The function will look for the value in the range named Bonus (the bonus table). The function will return the corresponding value from the second column of the bonus table. 8. Click on OK To close the dialog box and enter the function on the worksheet. 9. Copy the formula in cell G6 to the range G7:G10 To duplicate the bonus formulas for the other sales representatives. 2-11

Excel 2000: Advanced 10. Observe cell G8 The cell now displays the correct commission, $4. 11. Save the workbook Changing the lookup table Once you have created a VLOOKUP function, you can delete or add information within your lookup table, or change the information within your lookup table without changing your formulas. Task C-3: Observing the flexibility of the VLOOKUP function 1. Observe cell G10 Peruzzi s current bonus is $2. 2. Insert a new row in the bonus table above row 10 You will add a new level to the bonus table. 3. In cell I10, enter 55 In cell J10, enter 3 4. Observe cell G10 The cell now displays a new bonus amount, $3,000. The VLOOKUP function works properly without modification, even when you alter the bonus table. 5. Save and close the workbook 2-12

Lesson 2: Advanced formula construction d Using IS functions and the Auditing features IS functions There are nine worksheet functions beginning with IS that are used for testing the type of a value or reference and returning TRUE or FALSE depending on the outcome. The ISERROR function Error values, such as #N/A, #VALUE!, #REF!, #DIV/0!, #NUM!, #NAME?, or #NULL!, appear in cells when a formula cannot be calculated correctly. Error values always begin with a number sign (#). The ISERROR (value) function determines whether or not the value argument will return an error value, where the value argument can be a formula or a reference to a formula. The ISERROR function returns TRUE (if the value argument will return an error value) or FALSE (if the value argument will not return an error value). The value argument refers to any error value. You can also nest the ISERROR function within an IF function to return messages or values that are more meaningful than TRUE or FALSE. Task D-1: Observing the ISERROR function This worksheet is not particularly realistic. It contains several error values and some staged functions for the purpose of discussing errors and the Auditing features. 1. Open Errors & Auditing This is a quarterly sales report for a year of chocolate sales. 2. Scroll to see columns B through I, and then select cell I10 The cell displays 0 because the average of four zeros is 0. 3. Select cell I11 The cell displays the error value #DIV/0! because you cannot average four blank cells. 4. In cell D11, enter 0 The formula in cell I11 now results in 0 because it has one value (zero) to average. Undo the entry (Click on the Undo button.) 5. Select cell I12 and click on the Paste Function button To display the ISERROR function dialog box. 2-13

Excel 2000: Advanced Often when you set up a worksheet, you cannot be certain of the data that will be used as input for the formulas you write. You can use IS functions such as ISERROR to test data values to be sure they are valid before using them in calculations. Another way to test input values is to use the Data, Validation command to force user input to be validated upon entry. 6. Observe the formula bar and the ISERROR function dialog box 7. Click on Cancel To close the dialog box. 8. Select cell I13 Click on the Paste Function button This function returns TRUE if the value argument is any error value. In this case, the value argument is AVERAGE(D12:G12), which returns #DIV/0! because there are no values to average. The cell displays No Data. 9. Close the dialog box (Click on Cancel.) To display the IF function dialog box. First, the IF function tests to see whether the AVERAGE function is resulting in an error. If so, the function returns the text No Data. Otherwise, the function calculates the average. The Auditing features Large and complex worksheets might contain errors. If a formula is not calculating the result you expect, then you need to verify that the formula is using the correct data. To perform this task, which is often called troubleshooting, Excel provides several Auditing features. Excel s Auditing features include the ability to view, or trace, the cells that a formula uses to calculate its result (called cell precedents); the ability to trace cells containing formulas that use the result of the formula in the active cell (called dependent cells); and the ability to trace errors, such as circular references. With the Auditing features, you can see the flow of formulas by highlighting precedent and dependent cells with lines and arrows on your worksheet. This makes troubleshooting easier. The Auditing features are available either by choosing Tools, Auditing or by clicking on buttons on the Auditing toolbar. Cell precedents and dependents Precedents are cells that are referred to by a formula. Dependents are cells containing formulas that refer to the active cell. For example, if cell B10 contains the formula =SUM(B5:B9), and cell B35 contains the formula =B10+B34, then cells B5:B9 are precedents of cell B10, and cell B35 is a dependent of cell B10. 2-14

Lesson 2: Advanced formula construction Tracer arrows Tracer arrows graphically show the flow of data between cells that contain values and those that contain formulas. These arrows point in the direction that your data flows. There are three types of tracer arrows: Formula tracer arrows are displayed as solid blue on color screens and solid black on black-and-white screens. Error tracer arrows are displayed as solid red on color screens and as a dashed black arrow on black-and-white screens. External reference (or reference to another sheet in the same workbook) tracer arrows are displayed as dashed black arrows preceded by a worksheet icon. The Auditing toolbar The Auditing toolbar contains nine buttons that are shortcuts for using the tracer arrows and other Auditing features. To display the Auditing toolbar, choose Tools, Auditing, Show Auditing Toolbar or choose Auditing from the Toolbar shortcut menu. The Auditing toolbar s nine buttons are as follows: The Trace Precedents button draws arrows from the cells containing values used in the selected formula to the active cell. A border is also drawn around the cells used in the selected formula. Every time you click on this button, an additional level of precedents is added. The Remove Precedent Arrows button removes tracer arrows drawn as a result of using the Trace Precedents button. Arrows are removed one level at a time. To remove a second level, click on the button again. The Trace Dependents button draws arrows from the active cell to the cells that refer to the active cell in their formulas. Every time you click on this button, an additional level of dependents is added. The Remove Dependent Arrows button removes tracer arrows drawn as a result of using the Trace Dependents button. Arrows are removed one level at a time. To remove a second level, click on the button again. The Remove All Arrows button erases all tracer arrows from the worksheet. The Trace Error button helps you to identify the reason for an error value in your worksheet. The New Comment button displays the Cell Note dialog box. The Circle Invalid Data button enables you to see which pieces of data fall outside the parameters set by the Data, Validation command. The Clear Validation Circles button clears any circles created by using the Circle Invalid Data button. 2-15

Excel 2000: Advanced Task D-2: Using the Auditing toolbar to trace cell precedents q Objective: To use the Auditing features to make it easier to see the cells to which a formula refers. 1. Choose _Tools Auditing Show_Auditing_Toolbar_ To display the Auditing toolbar. 2. Dock the toolbar (Double-click on the title bar.) 3. Select cell D22 This cell contains the total sales for the first quarter. 4. Click on the Trace Precedents button Scroll to observe the tracer arrow Excel draws a blue box around the range of cells to which the formula refers. Excel also draws a tracer arrow from the first cell in the precedent range, through the entire precedent range, and to the active cell. Students might think that the precedents are obvious in the spreadsheet. Point out that in a very large spreadsheet, it can be difficult to keep track of which cells refer to which. The Auditing features can be most helpful in such cases. 5. Double-click on the tip of the tracer arrow 6. Select cell D22 Click on the Remove Precedent Arrows button Excel selects the entire precedent range. 7. Select cell H22 This cell shows the total sales for the year. The formula adds up all the individual sales representatives sales totals. 8. Click on the Trace Precedents button twice To see two levels of precedent arrows. This makes it very clear where the data used in the calculation is coming from. 9. Click on the Remove All Arrows button 2-16

Lesson 2: Advanced formula construction Task D-3: Tracing cell dependents q Objective: To use the Auditing features to make it easier to see the cells containing formulas that refer to the active cell. 1. Select cell D17 2. Click on the Trace Dependents button Observe the tracer arrows Excel draws tracer arrows from the active cell to all cells that contain formulas that refer to the active cell. 3. Click on the Trace Dependents button again To display the next level of dependent tracer arrows. 4. Click on the Remove All Arrows button Practice Task 1. Practice using the Trace Precedents and Trace Dependents buttons. 2. Remove any tracer arrows. Tracing errors If a formula results in an error value (for example #DIV/0!), you can use the Trace Error button to identify the source of the error. Task D-4: Using the Trace Error button 1. Select cell I24 This cell should contain the average sales per representative per quarter, but instead displays the error value #DIV/0!. 2. Click on the Trace Error button Excel displays arrows from the source of the error to the active cell. 2-17

Excel 2000: Advanced 3. Observe the tracer arrows (You will need to scroll.) The #DIV/0! error in cell I24 is a result of the #DIV/0! error in cell I11. That error is in turn caused by the lack of any values in its precedent range, D11:G11. 4. Remove all arrows MThe Auditing toolbar does not appear in the Toolbars shortcut menu, and therefore cannot be closed that way. Suggest to students that they use the Tools, Auditing, Show Auditing Toolbar command. 5. Close the Auditing toolbar (Choose Tools, Auditing, Show Auditing Toolbar.) 6. Close the workbook without saving changes 2-18

Lesson 2: Advanced formula construction ( Practice Unit for Lesson 2 In this activity, you will create an advanced IF formula. You will also work with the Auditing toolbar. 1. Open Practice - Advanced Formulas. 2. By using the Name box, investigate the existing range names in this worksheet. 3. By using the Paste Function dialog box, create a formula in cell G7 that will calculate a commission for Conner only if the sales total is greater than or equal to the quota. If it is not greater than or equal to the quota, have it return the text No Commis. To check your formula, see Figure 2-1. 4. Copy the formula created in step 3 to the range G8:G10. 5. Compare your screen to Figure 2-2. 6. Activate the Auditing sheet and investigate the reason for the DIV/0! error value in cell G15 by using the Auditing toolbar. 7. Remove any tracer arrows. 8. Resolve the problem by fixing the formula reference. (Cell G15 should be the average monthly surplus figure.) 9. Close the Auditing toolbar. 10. Save the file as My Practice - Advanced Formulas 11. Close the file. Figure 2-1: The IF function. Figure 2-2: The completed file My Practice - Advanced Formulas. 2-19

Excel 2000: Advanced ) Wrap-up for Lesson 2 a What are some advantages of naming ranges? Answers might include: you can refer to a name in a formula, making the formula easier to understand, and you can use names to move quickly to a certain area of the workbook or to specify print ranges. b Describe each of the three arguments of the IF function. The first argument defines the condition to test. Its purpose is to determine the condition under which each alternative action will be performed. The second argument defines what action to perform if the condition is true. Its purpose is to perform an action based on the result of the first argument. The third argument defines what action to perform if the condition is false. Its purpose is to perform an action based on the result of the first argument. c What is an advantage of using the VLOOKUP function rather than a nested IF function? If your data changes, you do not have to update your formula. d If #DIV/0! appears in a cell, how might you explore the problem? Select the cell and click on the Trace Error button on the Auditing toolbar. Does #DIV/0! indicate that your formula is incorrect? No, it may be that the cells referred to in the formulas are empty or contain #DIV/0! as well. 2-20