Dynamic Excel charts

December 9, 2009

Here’s a neat little trick to dramatically cut down the number of separate charts in a spreadsheet model.

Say you’ve got a monthly profit and loss statement with many rows of revenue and expense information. Once you’ve got all of your data in a worksheet you now want to analyse the information. Often you’ll want to select a particular line in the P&L and see a chart of the data. Well, you could just create a nice looking chart of that row of data and position it somewhere on your worksheet. Then you could repeat the process for every row of data that you’re interested in. Well this is lot of manual effort, plus it adds clutter to your worksheet. After all, you may only be interested in viewing one chart at a time. (Let’s assume for now that you don’t need to print these all out.) Read the rest of this entry »

Leave a Comment » | Financial Modelling | Tagged: , , , | Permalink
Posted by Darren Miller

Internal Rate of Return (IRR)

September 1, 2009

Many people know the old rule of thumb that at a 10% annual return, money doubles every seven years. (Actually it takes 7.27 years, but I guess this wouldn’t be a great rule of thumb.)

People who work in private equity, venture capital, or any other area where investment time horizons are measured in years rather than days, weeks or months – are generally pretty interested in the IRR of their investments. You’ll often hear a VC say something like “… we need a 35% IRR to justify so and so investment.” There’s plenty of discussion and debate elsewhere about the relevance of IRR as an investment measure, and the benefits of using IRR versus NPV (net present value) – so I’ll avoid getting into this debate here. Read the rest of this entry »

1 Comment | Financial Modelling | Tagged: , , , , , | Permalink
Posted by Darren Miller