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Introduction

Introduction

The book you just opened is different from most others on Excel that you may have seen because it focuses on a topic that is deeply important to all of us: money.

Rex Stout once wrote, “The science of accounting has two main branches, one being addition, and the other being subtraction.” I took these words to heart when I was casting about for the book's theme. I wanted to write a book that would show people how to maximize profit, the result of the two branches Stout cited.

Profit, of course, is not revenue. I can't teach you how to create revenue—that's more a matter for the heart, not the head—nor would I want to offer you MBA or CPA material. I did set out to write a book that any person engaged in any level of business could use as a refresher, from basic financial documents such as general ledgers and income statements, to operational methods such as statistical process control, to procedures that underlie investment decisions such as business case analysis.

I also wanted to structure the book around the most popular and sophisticated spreadsheet program available, Microsoft Excel. Therefore, each chapter in Business Analysis with Microsoft Excel, Second Edition provides information about a different business task or procedure, and discusses how best to apply Excel in that situation.

You will find reference to many Excel functions and capabilities that you may already use in your business activities on a daily basis. But you may also find discussions of tools that you have never used, or that you might never have considered using in the context of business analysis.

After all, no one can be completely familiar with every option in an application such as Excel. There are several Internet newsgroups frequented by Excel users where technical questions are posed and answered. Several years ago a question appeared about how to enter a number in a worksheet cell so that Excel would treat the number as text (this is quite a basic operation). Surprisingly, the question was posted by one of the most experienced, best known, and creative Excel consultants in the country. I thought that it was a put-on and responded in kind, but it turned out that the question was genuine.

So we all have gaps in our knowledge. The purpose here is to help fill in some of the gaps that may have appeared in your knowledge base since your last course in business, or since you first learned how to use a spreadsheet.

Business Analysis with Microsoft Excel, Second Edition makes liberal use of case studies: that is, situations that are typical of decisions or problems that you might face on any given workday. These case studies discuss, first, the problem itself: why it represents a problem and how a solution can contribute to a company's profitability. Then the case studies demonstrate at least one possible solution that uses Excel as a tool. The intent is for you to mentally put yourself in the situation described, work through it, and then apply the solution to an actual situation that you face.

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