Download - Session 5 Managerial Spreadsheet Modeling -- Prof. Juran1

Session 5

Managerial Spreadsheet Modeling -- Prof. Juran 1


Outline

Principles of Spreadsheet DesignEase-of-use for OthersColor


Add white space by increasing column width and row height.

Indent to help the users understand subtotals.

Consider not displaying the gridlines.

Increasing Ease-of-use by Others

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TotalLicenses 987 1,263 1,698 1,029 1,317 1,770 1,071 1,371 1,842 1,113 1,430 1,894 16,785 Services 446 475 518 465 495 540 484 515 562 503 535 584 6,122

Total Revenues 1,433 1,738 2,216 1,494 1,812 2,310 1,555 1,886 2,404 1,616 1,965 2,478 22,907 Cost of Sales 205 229 266 214 239 277 223 249 289 232 259 300 2,982

Gross Profit 1,228 1,509 1,950 1,280 1,573 2,033 1,332 1,637 2,115 1,384 1,706 2,178 19,925 Sales and Marketing 568 594 632 594 597 665 612 646 670 645 655 689 7,567 Research and Development 343 340 352 346 360 376 374 389 390 397 397 412 4,476 General and Administrative 254 256 258 254 266 270 264 272 269 272 276 280 3,191

Total Operating Expenses 1,165 1,190 1,242 1,194 1,223 1,311 1,250 1,307 1,329 1,314 1,328 1,381 15,234 Operating Profit 63 319 708 86 350 722 82 330 786 70 378 797 4,691

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TotalLicenses 987 1,263 1,698 1,029 1,317 1,770 1,071 1,371 1,842 1,113 1,430 1,894 16,785 Services 446 475 518 465 495 540 484 515 562 503 535 584 6,122 Total Revenues 1,433 1,738 2,216 1,494 1,812 2,310 1,555 1,886 2,404 1,616 1,965 2,478 22,907 Cost of Sales 205 229 266 214 239 277 223 249 289 232 259 300 2,982 Gross Profit 1,228 1,509 1,950 1,280 1,573 2,033 1,332 1,637 2,115 1,384 1,706 2,178 19,925 Sales and Marketing 568 594 632 594 597 665 612 646 670 645 655 689 7,567 Research and Development 343 340 352 346 360 376 374 389 390 397 397 412 4,476 General and Administrative 254 256 258 254 266 270 264 272 269 272 276 280 3,191 Total Operating Expenses 1,165 1,190 1,242 1,194 1,223 1,311 1,250 1,307 1,329 1,314 1,328 1,381 15,234 Operating Profit 63 319 708 86 350 722 82 330 786 70 378 797 4,691


Avoid the “ransom note effect:” Use only a few different fonts:

Ariel or Calibri, Times New Roman, New Courier

Use the standard symbolic fonts:– Insert | Symbol | Font– Symbol: , β, μ, ρ, Ψ, Π, Σ, Δ, Φ– Wingdings: , , , , , – Webdings: , , , , , – Downloadable fonts can be useful for printing or presenting,

but not for sharing with others; you cannot embed fonts in a workbook.

Use different colors, borders, shading (and patterns), font sizes, formatting, alignment.

– From the Home tab, launch the Font dialog box and Superscript / Subscript



Document with cell comments and adjacent descriptive labels.

– Center labels across columns, and over rows. Realign text.

Don’t scream (USE ALL CAPITALS).

Use graphical controls (e.g., sliders).

Be cautious about letting column widths vary.

(Carefully) use conditional formatting.

Don’t make people guess where information might be located.

Identify the “active area” of your spreadsheet.– Surround it with thick (embossed) borders.– Use highlighting shading (say, light yellow).– Shade the unused rows and columns light gray.

– Select everything, shade light gray, and then unshade the active area.

– Hide all of the unused rows and columns.



Remove extraneous/distracting elements.– Unused worksheets!– Gridlines row/column headers, formula bar: View |

Show/Hide group.– Scroll bars, sheet tabs, etc.: File | Options | Advanced |

“Display options for this workbook.”– View | Workbook Views | Full Screen is the most extreme.

Save users from themselves.– Protect cells and worksheets from inadvertent change.– Use data validation prompts.– Low-tech: Insert If(•) functions nearby to display error

messages when appropriate.– If(danger, "Warning!", "")



Emphasize the logical organization of information.

Tie together related — but physically separated — cells.

Increase information density in graphs.

Draw attention to warnings or outliers.

Add interest to a boring display.

Make sure you have some reason for using color.

Using Color


Recognize cultural associations for color. In the U.S.,– Red =– Black =– Blue =– Yellow =– Green =

For international cultural associations, check out www.informationisbeautiful.net/visualizations/colours-in-cultures/

To represent relative values, stick with some logical order.

Color Guidelines

Spectrum

Gradient

Bi-gradient


Take a screen shot that contains the color you’re looking for.

Launch Microsoft Paint, and Paste (Ctrl – v) in the image.

Use Tools | Color Picker , and click on the color you want.

Finding a Primary Color

That becomes Color 1; click on Edit colors and read off the RGB codes at the bottom right.

Now enter these RGB codes into Hypergurl.


Custom Color Schemeshttp://www.hypergurl.com/colormatch.php


• Don’t rely on it exclusively, but use it to reinforce information.– Most printing is still done in black and white.– 9% of Caucasian males have some form of color blindness.

o Color perception is associated with the X chromosome.o Red/Green is the most common.o Shades of brown and yellow are universally

recognized.

• Avoid pairing extremes of color spectrum, or garish combinations:

• Low error rates:

Color Concerns

Blue on Red Yellow on Purple Magenta on Green

Black on Blue Blue on White


• Use it consistently throughout.– E.g., all error messages are in red; all comments are on a

light yellow background; etc.

• Use it conservatively.– Maximum of 3 – 7 colors; strive for subtlety.– Avoid vibrant colors (especially for backgrounds).

o Thin or small objects (e.g., lines) need to have brighter colors.

– Consider inverse colors (e.g., white text on a dark background) for titles.

Color Concerns

2345678910111213141516

K L M N O P Q RVEURX VPACX VFINX VWESX VIGRX VEXPX NAESX VWIGXEurope Pacific USA Bonds Growth Explorer Small-Cap International

-0.6% 1.6% 2.2% -4.0% 2.7% 4.9% 4.7% 1.6%-0.3% -5.1% 1.6% -2.7% 1.3% 7.5% 6.0% 0.9%-4.2% -7.0% -3.3% 2.2% -2.2% -3.5% -2.7% -3.8%0.7% 7.6% 1.0% -0.6% 0.3% -1.8% -0.3% 1.3%4.4% 3.7% 1.2% -2.9% -0.5% 6.0% 6.0% 3.6%-0.4% 3.7% -5.2% 2.4% -6.5% -1.9% 1.0% 0.9%-0.2% 4.7% -1.6% 0.3% -2.6% -4.9% -4.4% -1.1%-3.4% -5.2% -7.4% -0.1% -8.2% -8.0% -4.6% -4.2%-11.1% -6.7% -7.7% -0.1% -4.7% -12.8% -15.0% -10.1%-0.1% -0.8% 0.7% 4.3% 0.6% 0.3% -0.2% 0.0%-13.1% -5.7% -11.3% 2.1% -10.7% -6.7% -7.2% -12.0%9.6% -3.3% 8.8% -4.3% 9.2% 4.1% 3.2% 7.0%


Take-aways• As with traditional computer programming languages,

there are style guides for building and maintaining spreadsheets.

• The appropriate levels of documentation, ease-of-use features, and error prevention features, will depend on who will be using the spreadsheet, and how frequently.

• Accountants have a well-defined style, which is appropriate for their B&W hard copies.

• Embed hyperlinks into large workbooks to facilitate navigation.

• Be consistent!– Within your spreadsheet.– With generally accepted conventions.– With your corporation’s style guidelines.


Take-aways• Always identify parameters in their own labeled cells,

never buried in an equation.• Design your spreadsheet so that equations depend on

values above and to their left.• Eliminate circular references if at all possible.• Use comments liberally to explain what you’re doing.

(They can always be turned off.)• Don’t be content with Excel’s default format; there’s a

lot you can do to make it easier for others to understand your spreadsheet.

• Use color appropriately in order to reinforce connections and to clarify distinctions.


• Consider the worksheet “Trouble”.• Apply good design principles to improve its layout and

readability.– “Graying Out” and/or hiding all but a small portion of

the worksheet.– Adding embossed borders (if you want).– Turning off some extraneous features (row and column

headings, scroll bars, sheet tabs, etc.)– Invoking View | Workbook Views | Full Screen.– Entering special symbols from Insert | Symbol.– Entering special symbols from (say) the Wingding font.– Mixing italic characters and subscripts; e.g., μt.

Hands-on Practice

Download - Session 5 Managerial Spreadsheet Modeling -- Prof. Juran1

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