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Numbers and financial data drives today's business world and Excel 2007: Financial Analysis can help decode this information. The proper understanding of these numbers, and the formulas behind them, can be the gateway to corporate and personal success. Microsoft MVP (Most Valuable Professional) Curt Frye teaches basic fluency in corporate finance, enabling users to see the meaning behind essential financial calculations. Curt explains how to review formulas to ensure they have the proper inputs, and shows how to interpret formula output. He also covers how to calculate leverage ratios and amortization and depreciation schedules, as well as forecast future growth. Exercise files accompany this course.
Pivot Tables enable you to analyze your data efficiently, but some questions can only be answered by performing calculations on the data used to create your pivot table. To perform that type of analysis, you can create calculated fields that summarize pivot table data using a formula. Without calculated fields, you would have to copy the data from your pivot table, paste it onto another worksheet and create the formulas there. That's a pain. It's extra work that you absolutely do not have to go through. Now how to create a calculated field in an Excel 2007 pivot table isn't the most intuitively obvious thing.
So I'll just show you where it is on the user interface so you can do it later. To create a calculated field, first you select any cell in the pivot table and then on the Pivot Table Tools Options tab of the ribbon, you go to the Tools group and click Formulas and that's where you find the Calculated Field menu item. So click that and you get the Insert Calculated Field dialog box. And what you do here is create a name for your field.
The goal for this field is to calculate a company's revenue as a proportion of the cost of goods sold. So it will be dividing revenue by COGS. So for that one, I'll just call it Times COGS, press Tab and the formula will be equal. And then again, I want to divide revenue by cost of goods sold. So I'll click Revenue, insert that field into the formula, forward slash to indicate division and then I insert the Cost of Goods Sold field.
So there we have our calculated field and everything looks correct. So I'll click OK. The Times COGS field appeared in the Pivot Table Field List and it also appears down here in the pivot table values area. So at present, our pivot table has two data fields. We have the sum of revenue and we then we also have the sum of times cost of goods sold. So I'll remove the Revenue field from the data area for the moment and you can see here, in January 2008, we had a ratio of 17:1 and the data field is currently configured the way it was before to display numbers as a currency or accounting field.
So I'm going to change the data type just to make it easier to read. To do that, you right-click a cell that contains the data that you want to change and click Number Format and from the list of available values, in this case I'll click Number and I'll put two decimal places on it. Click OK and there we have it. We have a ratio of 16.75, which again is different from 17. The rounding got taken care of when we added the decimal points. Calculated fields extends the types of analysis you can perform in Excel, which makes pivot tables even more useful for your financial analyses.
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