1. Spreadsheet Modelling
Chapter 4

2. Contents
This presentation covers:
Variables
Formulae
Rules
Functions

3. Variables Variables are symbols or names which represent a value.
For example, a variable can be called VAT and a value can be attached to that variable.
VAT_RATE = 17.5
Variable Name
Value of variable

4. Variables
A variable can be associated with a particular cell in a spreadsheet.
In this example, Cell A2 represents the VAT_RATE variable. The contents of the cell is it’s value.

5. Formulae
Formulas are used in spreadsheets to increase the flexibility of the spreadsheet.
To work out a price of a product you need to know the price excluding VAT and the value of VAT based on the original price.
Final Price = price ex.VAT + ((price ex.VAT*VAT_RATE)/100)
£ = £12 + ((£12 x 17.5%)/100)
£ = £

6. Formulae By using variable names a formula can become quite flexible.
If the value of VAT changes we would only need to change it once because formulas would be using the variable name instead of the actual value.
This would cause all values which used the variable name VAT_RATE in their formula to automatically update.

7. Rules Rules are things which must be followed.
They can also be a consequence of something
e.g. If the price of flour goes up then the price of bread goes up.
In a spreadsheet, it may be that two values are required to perform a calculation.
Validation checks can be added to ensure that these are provided before the calculation takes place to avoid errors.

8. Rules Some rules involve a sequence of events.
For example, to calculate the number of points an F1 driver has and to see who is the winner:
For each driver
For each race
Enter points received
Add all the points together
Find highest score
Return Winner

9. Functions Functions are used to simplify complex formulas.
Functions use reserved words which the user can enter into a spreadsheet.
Common functions include:
SUM: Adds up a range of numbers and provides a total.
MAX: Searches a range of numbers and provides the highest value
LOOKUP: Gives a value from an array based on a given value.

10. Take note: Define the term variable.
Give an advantage of naming a cell.
Describe two differences between functions and formulae.
Give an example of a function and a rule that perform the same action.
In the context of modelling, what is a rule?
Describe the rule required to work out someone’s age on a particular date.