$100 Million Spreadsheet Error

Tibco Software recently agreed to be acquired for $4.2 billion by Vista Equity Partners. Usually, an announcement such as this ends the negotiations regarding price. However, in this case, an error in a spreadsheet overvalued Tibco by $100 million. As a result, Vista will only have to pay $4.1 billion for Tibco. The reduction in value will lower the payment to Tibco shareholders by $.61 per share.

Macros For Excel

You may have noticed when you open the Excel Master files you have downloaded, Excel will likely open the files in "Protected Mode". The reason this happens is that Excel allows you to create macros. Macros are a program written to eliminate the need to redo common tasks. For example, you can create a macro to calculate the future value of a growing annuity, a function that is not readily available in Excel. However, in using a spreadsheet created by someone else, there is the possibility that they have written a malicious macro in to the Excel workbook. As this article explains, using the Protected Mode allows you to see everything that is coded into the workbook without allowing the workbook access to your computer, thus preventing a malicious code from being loaded onto your computer.  

Creating Charts In Excel

While you have done a great job with your data analysis, a chart or graph is often the best way to convey the information. And while we think Excel Master does a good job introducing you to Excel's charting capabilities, for more on creating charts and graphs in Excel, check out this article from PCWorld.

Adding In An Excel Ad

A recent advertisement for Microsoft's Surface tablet highlighting Excel shows how a spreadsheet can be incorrectly constructed. In this case, the marketing company either didn't know how to use Excel, or at least didn't know how to use Excel very well. Excel is a great tool for financial calculations. While the mistakes in this ad are humorous, other Excel mistakes could end up costing you and/or your company money, so take care when you construct spreadsheets.

Spreadsheets And GIGO

JPMorgan Chase's recent $6 billion trading loss was viewed as a huge error in judgement. However, the company laid the blame for a portion of the loss on an error in a spreadsheet. Spreadsheets are a valuable tool in Finance, but the old adage of "Garbage in, garbage out" (GIGO) still applies. Software has helped improve the accuracy of spreadsheets. When you consider that companies may have 50,000 or more spreadsheets, you should recognize the sheer number of possible errors. And, if you are not sure why you should learn to use Excel, consider one number in the article: More than 59 percent of Finance employees spend more than one-half of their time working with spreadsheets.

Multiple Regression Using Excel

While we certainly hope that Excel Master helped explain how to estimate a regression equation in Excel, there are definitely more uses for regression equations than CAPM or APT. For a quick look at another use, check out this regression analysis by Excel guru Bill Jelen. http://www3.cfo.com/article/2012/6/spreadsheets_excel-regression-analysis