Most people who use spreadsheets for financial modelling will have encountered the dreaded problem of circular references. If you don’t know what a circular reference is, then this post is not for you – at least not yet. Perhaps bookmark this page and come back one day when Excel barfs at you for writing a formula which refers to itself.
Circular references are the financial modeling equivalent of the old philosophical causality dilemma, typically stated as “which came first, the chicken or the egg?”
Circular references in spreadsheets can be either a) intended, or b) unintended. If they are the latter, then there is a mistake in your model and the circular reference should be eliminated as soon as possible. Read the rest of this entry »
Posted by Darren Miller 
