The Business Ways

Making financial forecasts or performing investment analyses that need to include depreciation? Microsoft Excel can help. Excel’s DB, or declining balance, depreciation function lets you calculate fixed-declining balance depreciation.

The DB function calculates fixed declining balance depreciation for an asset given the cost, it’s salvage value, estimated economic life, the accounting period for which depreciation is being calculated, and, optionally, the number of month in first year. (If you don’t include the optional month argument, Excel sets this value to 12.) The DB function uses the following syntax:

DB (cost, salvage, life, period, month)

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Making bond duration calculations? Microsoft Excel can help. Excel provides two functions that help you with bond duration calculations.

Excel provides two functions that let you make bond duration calculations: DURATION and MDURATION. Duration, a weighted average measure of the present value of a bond’s cash flows, quantifies how a change in the bond yield affects the bond price.

Understanding the Bond Duration Function Arguments

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Need to work with chi square distributions? Don’t forget that Microsoft Excel supplies powerful tools for performing just this sort of statistical analysis.

The chi-square distribution is commonly used to make inferences about a population variance.

If a population follows the normal distribution, you can draw a sample of size N from this distribution and form the sum of the squared standardized scores (chi-square). This random variable chi-square follows the chi-square probability distribution with n degrees of freedom (df ), where n is a positive integer equal to N-1. The degrees of freedom parameter determines the shape of the distribution. With more degrees of freedom, the skew is less.

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Need to calculate statistical averages? Microsoft Excel supplies several easy-to-use statistical functions for just such a purpose says bestselling computer book author Stephen L. Nelson

Excel provides useful functions for finding the mean, median, and mode of a data set. In general, the functions look at a set of values and then make the expected calculation. For example, the mean functions, which calculate averages, take the sum of the values in the set and divide it by the number of values.

AVERAGE

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Need to count the cells in a worksheet range that contain data averages? Microsoft Excel supplies several easy-to-use functions for just such a purpose says bestselling computer book author Stephen L. Nelson

If you select a range of cells, you can have Excel find how many cells are in that range using the count functions. This sounds a little goofy, but a handful of easy-to-understand examples show how this works–and suggest when you might want to use the “cell counting” functions.

COUNT

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Making financial forecasts or performing investment analyses that needs to include double declining balance depreciation? Microsoft Excel can help. Excel’s DDB, or double declining balance, depreciation function lets you calculate 200% declining balance depreciation.

The DDB function calculates double-declining balance depreciation for an asset given the cost, its salvage value, estimated economic life, the accounting period for which depreciation is being calculated, and, optionally, the factor at which the balance declines. (If you don’t include the optional factor argument, Excel sets this value to 2 indicating “double? declining balance.) The DDB function uses the following syntax:

DDB(cost, salvage, life, period, factor)

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