Basic Formatting. Good formatting is an important part of building a financial model.

While it is
critical to get the numbers right, making the model look good is the next logical step. A well-
formatted model is more readable, user-friendly, and easy to navigate. Moreover, a modeler will
find it easier to work with the model if it is formatted. In the latest version of Excel, all the
formatting options for color, font, and alignment are displayed on the Home tab. A shortcut exists
on the Home tab where one can quickly change the number format of any cell from the Number
ribbon,

Custom Formatting. Another form of formatting is customizing the way data is displayed in cells
without changing the underlying data. For example, the function NOW() gets the current date and
time from the computer and, by default, displays it in the format "dd/mm/yyyy hh:mm." One can
change the look of this date without disturbing its intrinsic value by formatting it differently.
Given below are sample steps of how to do it:

1. Open a blank spreadsheet and type into cell A1 "Report as at." On the other hand, type the
function =NOW() or =TODAY() in cell B1, as shown below..

Then select B1 and go to the formatting dropdown in the Home tab. Select More Number Formats
at the bottom of the dropdown list. When selected, it will prompt a dialogue box that contains
various formatting options for numbers, from General to Accounting to Custom, as shown on the
figure given on the next page.

Conditional Formatting. It is a tool that allows a modeler to apply formats to a cell or range of
cells depending on the value of the cell or the value of a formula. For example, a modeler can
have data in the cell to be bold only when the cell value is greater than 100. When the cell value
meets the format condition, the format chosen by the modeler is applied to the cell. If the cell's
value does not meet the format condition, the cell's default formatting is used. One example of
conditional formatting is in preparing a Statement of Comprehensive Income (SCI). If the modeler
wants to highlight any instance where a variance is 10% higher than the budget or more, the cell
will turn red.

Protecting the file. This is to prevent anyone from opening the model. This can be done by
changing the

options and saving over the existing copy of the file. There are two (2) options with this:

05 Handout 1

student feedback@sti.edu

*Property of STI Page 5 of 14

STI
BM2109

Password-protect the file. This is to prevent anyone from opening or to make changes in the file

without a password. Given below are the steps of doing it:

1. Click the File menu in the top left-hand corner of the screen and select Save As.

2. Click the Tools button and select General Options.

3. Enter the password and save the file.

Recommending read-only. Instead of using a password to prevent access, one can use the read-
only

option to deter users from changing the workbook. Given below are the steps in enabling the read
only option:

1. Click the File menu in the top left-hand corner of the screen and select

2. Click the Tools button and select General Options.

3. Check the Read-Only Recommended checkbox.

Protecting the structure. This is to prevent anyone from making structural changes in the
workbook. This is normally used for hiding worksheets and restricting access to them. The
following are the steps in protecting the structure of a workbook:

1. Click the Review bar and then choose Protect Workbook. A dialogue box will be prompt. 2.
Enter the password in the dialogue box.

Protecting the Worksheet. This is to prevent anyone from changing the inputs in the worksheet. In

protecting the sheet, one can choose whether to protect the whole sheet or just certain key cells in
the sheet.

• Protecting the whole sheet. Given below are the steps in protecting a worksheet: 1. Go to the
sheet to be protected.

2. On the Review tab, in the Changes group, select Protect Sheet.

from unprotecting the sheet. 4. Enter a password and click OK. Afterward, confirm the password.

5. The whole sheet is now protected. Users will not be able to change the contents of any cell. To
change the data in the sheet, unprotect the sheet first.

Checkboxes. They are very handy tools that can help users choose their desired options from a list.
By

building checkboxes into a financial model, the developer allows users to customize the model by

adjusting the combinations of inputs for the financial model's assumptions.

Below are the steps in creating Checkboxes:

1. Go to the Developer tab on the Excel toolbar and click on Insert.

2. From the Form Controls menu, select the checkbox and then draw it anywhere in the sheet.

3. Link the checkmark in the box to any cell in the model. To do it, open the Format Control
associated

with the checkbox. Right-click on the checkbox and select Format Control. Alternatively, select
the checkbox and click Properties on the ribbon under the Developer tab.

4. In the Format Control dialog, select the default value of the checkbox (unchecked, checked, or
mixed).

To enhance the look of the checkbox, select "3-D shading".

5. The cell to which the status is linked will have a Boolean value of TRUE or FALSE. Because
TRUE has a

value of 1 and FALSE has a value of 0, they can be used in calculations. 6. Add multiple
checkboxes corresponding to the items in the list and then design the financial model to pick the
said items.

Spin buttons. They control what users can enter into the input fields in the financial models. By
including a spin button, users can increase or decrease the number in the increments specified in
the model. For example, the current value in the data is 400, and the modeler sets an increment of
five (5). When users hit the up arrow in spin buttons, it will change to 405, then 410, 415, and so
on. The following are the steps in creating a Spin button:

1. Go to the Developer tab on the Excel toolbar, click on Insert, and select the Spin button.

2. Draw the Spin button next to the input box for the value to be controlled. 3. Edit the properties
of the button using Format Control.

4. In the Format Control dialog box, specify the minimum and maximum values for the Spin
button.

Specify also the cell in which you want to place the values.

5. Press the arrows up and down and see the values in the model change.

Combo boxes. They are alternatives to the data validation dropdown tools. The advantage of the
combo box is that the dropdown arrow is visible whether the cell is selected or not. This is a
significant advantage if users are not very Excel savvy. However, a combo box takes much longer
to build, requiring more cells for the process and, therefore, less efficient. For these reasons, most
modelers prefer the data validation dropdown tool..

Given below are the steps in creating a combo box:

1. Go to the Developer tab on the Excel toolbar and click on Insert.

2. From the Form Controls menu, select the Combo Box.

3. Draw the Combo Box next to the input box for which you want to control input. Note: It does
not need to fit neatly into a cell.

4. To fix the inputs, create an input box with inputs.

5. Associate now the inputs with the combo box using Format Control. Access the Format Control
dialog

box in the same manner as for the other form controls. 6. In the Format Control dialog box, give
the Input Range and the Cell Link. The output cell will only indicate the item number selected. For
example, 1 for optimistic, 2 for likely, and 3 for pessimistic. To translate these numbers into
meaningful percentages from the chart, link the growth amounts in the
column to the output cell. This can be done using IF, INDEX, or even a CHOOSE function in
Excel. 7. Practice changing the combo box, and see the values change.