Chapter 3 Logical and Lookup Functions

Freeze Panes

The Investment Detail worksheet shown in Figure 3.2 "Investment Detail Worksheet" contains the majority of the information used to create the Portfolio Summary worksheet shown in Figure 3.1 "Completed Personal Investment Portfolio Workbook". When you first open the worksheet, you will notice it is not possible to view all twenty-four columns on your computer screen. As you scroll to the right to view the rest of the columns, you will lose site of the row headings in Columns A and B. The headings in these columns show the investment that pertains to the data in Columns C through X. To solve this problem of viewing the row headings while scrolling through the remaining columns in the worksheet, we will use the Freeze Panes command.

The Freeze PanesAn Excel command that allows you to lock specific columns and rows in place while scrolling through a large worksheet. command allows you to scroll across the Investment Detail worksheet while keeping the row headings in Columns A and B locked in place. The following steps explain how to do this:

1. Click cell C4 on the Investment Detail worksheet. We select this cell because the Freeze Panes option locks the columns to the left of the activated cell as well as the rows above the activated cell.
2. Click the View tab on the Ribbon.
3. Click the Freeze Panes button (see Figure 3.3 "Freeze Panes Command").
4. Click the Freeze Panes option from the drop-down list of options.

Once you click the Freeze Panes option shown in Figure 3.3 "Freeze Panes Command", Columns A and B are locked in place as you scroll through the columns in the worksheet. Since this is a large worksheet, you may find it easier to navigate the columns by using the arrow keys on your keyboard. However, since rows 1 and 2 contain merged cells, make sure a cell location is activated below Row 2 before you begin using the arrow keys. Figure 3.4 "Freeze Panes Command Activated on the Investment Detail Worksheet" shows the appearance of the Investment Detail worksheet after the Freeze Panes command has been activated. To deactivate the Freeze Panes command, click the Freeze Panes button again and select the Unfreeze Panes option.

Formula and Functions Review

We will begin developing the personal investment portfolio workbook by adding several formulas and functions. The formulas and functions we will add were illustrated in detail in Chapter 2 "Mathematical Computations". Therefore, the steps provided in this chapter will be brief. After the formulas and functions are added to the Investment Detail worksheet, we can add the logical and lookup functions. However, before proceeding, let’s review the investment type definitions in Table 3.1 "Investment Types in Column A of the Investment Detail Worksheet". Table 3.1 "Investment Types in Column A of the Investment Detail Worksheet" provides a definition for each of the investment types listed in Column A of the Investment Detail worksheet. This project assumes that the personal investment portfolio comprises four types of investments. The reason we include a variety of investment types in any portfolio is to manage our total risk, or potential of losing money. When building an investment portfolio, it is important to keep in mind that investments of all types can dramatically increase or decrease in value over a short period of time. Managing risk requires that your money is not concentrated in one type of investment.

We will begin adding formulas and functions to the Investment Detail worksheet in sections. If you scroll across all the columns in the worksheet, you will notice the worksheet includes five distinct sections. Four of the five sections contain columns that need to be completed with formulas and functions before we can add the logical and lookup functions. Table 3.2 "Definitions for Columns A through G of the Investment Detail Worksheet" contains definitions for each of the columns in the Descriptive Information section (Columns A through D) and the Purchase section (Columns E through G). It will be helpful to understand the purpose of these columns as we complete this worksheet.

The Descriptive Information section of the Investment Detail worksheet (Columns A through D) contains only one blank column, which will be completed using a lookup function. Therefore, we will proceed to the Purchase section (Columns E through G) where the Cost of Purchase column is blank. The following steps explain how to enter the formula into this column:

1. Click cell G4 on the Investment Detail worksheet.
2. Type an equal sign (=).
3. Enter a formula that multiplies the Shares Purchased (cell E4) by the Purchase Price per Share (cell F4).
4. Copy the formula in cell G4.
5. Highlight the range G5:G18.
6. Click the down arrow on the Paste button in the Home tab of the Ribbon.
7. Click the Formulas button from the list of options. This is the Paste Formulas command, which pastes only the formula without any associated formats for the copied cell location.
8. Click cell E19 on the Investment Detail worksheet.
9. Press and hold the ALT key on your keyboard, then press the equal sign (=). This is the shortcut for the Auto Sum feature.
10. Press the ENTER key on your keyboard.
11. Click cell G19 on the Investment Detail worksheet.
12. Repeat step 9.
13. Press the ENTER key on your keyboard.

Figure 3.5 "Completed Formula in the Cost of Purchase Column" shows the formula that was entered into cell G4 in the Purchase section of the Investment Detail worksheet. You can also see the results of the formula after it is pasted into the range G5:G18. The Paste Formulas option was used to paste the formula into this range so the borders would not be altered.

Table 3.3 "Definitions for Columns H through K of the Investment Detail Worksheet" shows the definitions for the Current Value section (Columns H through K) of the Investment Detail worksheet.

We will add a basic formula to the Current Purchase Value and Current Investment Value columns. For the Estimated Dividend Payments column, we will use the FV (future value) function to estimate the dividend payments. The following explains how we add the FV function to the Estimated Dividend Payments column:

1. Click cell J4 and type an equal sign (=).
2. Type the function name FV followed by an open parenthesis (().
3. Click cell D4, type a forward slash (/) for division, and then type 12. This divides the rate in the Dividend/Yield column by 12. The length of ownership of an investment is expressed in terms of months in Column Q. Therefore, the rate for the FV function must be expressed in terms of months by dividing the annual rate by 12.
4. Type a comma.
5. Click cell Q4, which contains the number of months owned or the term of the future value calculation.
6. Type a comma followed by a zero (,0). We are not calculating an annuity or periodic investment in this example, so the PMT argument will be defined with a zero. Type a comma to advance the function to the Pv argument.
7. Type a minus sign (−) and click cell G4. This is the cost of the investment purchase previously calculated.
8. Type a closing parenthesis ()).
9. Type a minus sign (−) and click cell G4. By itself, the FV function is calculating the total value of the investment with dividends or interest earned. To show only the amount of dividends or interest earned, we subtract the cost of the investment purchase in G4 from the result of the FV function.
10. Press the ENTER key on your keyboard.
11. Adjust the decimal places for the output of the FV function to zero.
12. Copy the FV function in cell J4 and paste it into the range J5:J18 using the Paste Formulas command.

Figure 3.6 "Completed FV Function in the Estimated Dividend Payments Column" shows the completed FV function in cell J4 of the Estimated Dividend Payments column. It is important to reduce the decimal places to zero after you enter the function into cell J4. Excel does not display the result of the function until the decimal places are removed because of the column width.

The following steps explain how to add the formulas for the Current Purchase Value and Current Investment Value columns:

1. Click cell I4 on the Investment Detail worksheet.
2. Enter a formula that multiplies the Current Price in cell H4 by the Shares Purchased in cell E4.
3. Copy the formula in cell I4 and paste it into the range I5:I18 using the Paste Formulas command.
4. Click cell K4 on the Investment Detail worksheet.
5. Enter a formula that adds the Current Purchase Value in cell I4 to the Estimated Dividend Payments in cell J4.
6. Copy the formula in cell K4 and paste it into the range K5:K18 using the Paste Formulas command.
7. Click cell K19 on the Investment Detail worksheet.
8. Enter a SUM function that adds the values in the range K4:K18.

Figure 3.7 "Completed Current Value Section of the Investment Detail Worksheet" shows the completed columns of the Current Value section in the Investment Detail worksheet. The formula used to calculate the Current Investment Value illustrates why we used the FV function to calculate the estimated dividend or interest payments for an investment. Investments that earn interest or dividends can achieve growth in two ways. The first way is through interest or dividend payments. The second way is through changes in the price paid for the investment. The formula used to calculate the Current Purchase Value is taking the number of shares purchased for each investment and multiplying it by the current market price. Therefore, the Current Investment Value takes into account any changes in the investment price by adding the purchase value at the current market price to any dividends or interest payments earned.

Table 3.4 "Definitions for Columns L through R of the Investment Detail Worksheet" provides definitions for the Percent of Portfolio section of the Investment Detail worksheet (Columns L through R).

The Percent of Portfolio section of the Investment Detail worksheet (Columns L through R) requires two formulas and one function. The following steps explain how we add them to the worksheet:

1. Click cell L4 in the Investment Detail worksheet.
2. Enter a formula that divides the Current Investment Value in cell K4 by the total in cell K19.
3. Place an absolute reference on cell K19 in the formula by placing the cursor in front of the column letter and pressing the F4 key on your keyboard.
4. Copy the formula and paste it into the range L5:L18 using the Paste Formulas command.
5. Click cell N4 in the Investment Detail worksheet.
6. Enter a formula that subtracts the Target Percent of Portfolio (cell M4) from the Current Percent of Portfolio (cell L4): L4−M4.
7. Copy the formula and paste it into the range N5:N18 using the Paste Formulas command.
8. Click cell Q19 in the Investment Detail worksheet.
9. Enter an AVERAGE function that calculates the average of the values in the range Q4:Q18.

Figure 3.8 "Percent of Portfolio Section of the Investment Detail Worksheet" shows the results of adding two formulas and a function to the Percent of Portfolio section of the Investment Detail worksheet. Notice the absolute reference added to the cell reference for K19 in the formula in the Current Percent of Portfolio column.

Table 3.5 "Definitions for Columns S through X of the Investment Detail Worksheet" provides definitions for the columns in the Performance Analysis section of the Investment Detail worksheet.

Most of the columns in the Performance Analysis section of the Investment Detail worksheet will be completed with formulas and functions. The following steps explain how we add them to the worksheet:

1. Click cell S4 on the Investment Detail worksheet.
2. Enter a formula that subtracts the value in the Cost of Purchase column (cell G4) from the value in the Current Investment Value column (cell K4): K4−G4.
3. Copy the formula and paste it into the range S5:S19 using the Paste Formulas command. Note that this formula will be used to calculate the output for the Total row in this column. The results of the formula are showing how much money has been earned or lost for each investment. It is important to note that these gains or losses do not actually happen unless the investment is sold.
4. Click cell T4 on the Investment Detail worksheet.
5. Enter a formula that divides the Unrealized Gain/Loss (cell S4) by the Cost of Purchase (cell G4): S4/G4.
6. Copy the formula in cell T4 and paste it into the range T5:T19 using the Paste Formulas command.
7. Click cell V4 on the Investment Detail worksheet.
8. Enter a formula that divides the Percent Gain/Loss (cell T4) by the result of dividing the Months Owned (cell Q4) by 12: T4/(Q4/12). Dividing the Months Owned value by 12 expresses the amount of time an investment has been owned in terms of years. The benchmark growth rates for most investments are expressed in terms of annual return rates. Therefore, this formula must first express the amount of time an investment has been owned in terms of years. Then the total percentage gain or loss for each investment is divided by the length of ownership in years to calculate the actual annual rate of return.
9. Copy the formula in cell V4 and paste it into the range V5:V19 using the Paste Formulas command.
10. Click cell W4 on the Investment Detail worksheet.
11. Enter a formula that subtracts the Target Annual Growth Rate (cell U4) from the Actual Annual Growth Rate (cell V4): V4−U4.
12. Copy the formula in cell W4 and paste it into the range W5:W18 using the Paste Formulas command.

Figure 3.9 "Performance Analysis Section of the Investment Detail Worksheet" shows the results of the formulas added to the Performance Analysis section of the Investment Detail worksheet. This completes the required formulas and functions necessary to add before moving on to the logical and lookup functions of the chapter.

The Logical Test

A key component for the logical functions that will be demonstrated in this section is the logical testAn expression used to evaluate the contents of a cell location. The logical test typically contains comparison operators such as equal to (=), greater than (>), less than (<), and so on. The results of the logical test can be either true or false. An example of a logical test is B8 >= 25, which is read as “if the value in cell B8 is greater than or equal to 25.”. A logical test is used in logical functions to evaluate the contents of a cell location. The results of the logical test can be either true or false. For example, the logical test C7 = 25 (read as “if the value in cell C7 is equal to 25”) can be either true or false depending on the value that is entered into cell C7. A logical test can be constructed with a variety of comparison operators, as shown in Table 3.6 "Comparison Operator Symbols and Definitions". These comparison operators will be used in the logical test arguments for the logical functions demonstrated in this chapter.

A logical test will be used to evaluate the contents of a cell location in the Investment Detail worksheet. We will first demonstrate how the logical test is used to evaluate the contents of a cell location. Then we will use this logical test in the IF function, which will be demonstrated next. The following steps explain how the logical test is constructed:

1. Click cell R4 on the Investment Detail worksheet.
2. Type an equal sign (=).
3. Click cell Q4.
4. Type the greater than sign (>) followed by an equal sign (=).

5. Type the number 12. This completes the logical test, which is shown in Figure 3.10 "Logical Test Entered into the Investment Detail Worksheet". The logical test would be stated as: “If the value in cell Q4 is greater than or equal to 12.”

   Figure 3.10 Logical Test Entered into the Investment Detail Worksheet

   
6. Press the ENTER key on your keyboard. Notice that the output of the logical test is the word TRUE. This is because the value in cell Q4 is 48, which is greater than 12 (see Figure 3.11 "Output of the Logical Test").
7. Copy the logical test in cell R4 and paste it into the range R5:R18 using the Paste Formulas command.

Figure 3.11 "Output of the Logical Test" shows the results of the logical test after it is pasted into the range R5:R18. Notice that for any values that are less than 12 in the range Q4:Q18, the logical test produces an output of FALSE.

IF Function

The IF function is used to produce a custom output based on the results of a logical test. If the results of the logical test are TRUE, the IF function can display a specific number or text, or perform a calculation. If the results of the logical test are FALSE, the IF function can display a different number or text, or perform a different calculation. The arguments of the IF function are defined in Table 3.7 "Arguments for the IF Function".

We will use the IF function in the Percent of Portfolio section of the Investment Detail worksheet. We will use the logical test that was previously demonstrated within the IF function to determine if an investment has been held for a short or long period of time. For tax purposes, an investment is considered short-term if it is held less than twelve months. This requires the investor to pay a higher tax percentage for any profit earned on the investment. An investment held twelve months or longer is considered a long-term investment. The following explains how the IF function is used to identify which investments are long term or short term:

1. Highlight the range R4:R18 on the Investment Detail worksheet and press the DELETE key on your keyboard. This will remove the logical test and allow us to replace it with an IF function.
2. Click cell R4 on the Investment Detail worksheet.
3. Click the Formulas tab on the Ribbon.
4. Click the Logical button in the Function Library group of commands.

5. Click the IF function from the list of functions (see Figure 3.12 "Selecting the IF Function from the Function Library"). This opens the Function Arguments dialog box.

   Figure 3.12 Selecting the IF Function from the Function Library

   
6. Click the Collapse Dialog button next to the Logical_test argument (see Figure 3.13 "Logical_Test Argument Defined").
7. Click cell Q4 and press the ENTER key on your keyboard.
8. Type the greater than sign (>) followed by an equal sign (=).

9. Type the number 12.

   Figure 3.13 "Logical_Test Argument Defined" shows the appearance of the IF Function Arguments dialog box after defining the Logical_test argument. Notice that next to the Logical_test input box, Excel shows that the results of the test are true. This makes sense given that the value in cell Q4 is 48, which is greater than 12.

   Figure 3.13 Logical_Test Argument Defined

   
10. Press the TAB key on your keyboard to advance to the next argument, which is Value_if_true.
11. Type the word Long in quotation marks. If you forget to put words or text in quotation marks using the Function Arguments dialog box, Excel will insert the quotation marks for you.
12. Press the TAB key on your keyboard to advance to the next argument, which is Value_if_false.
13. Type the word Short in quotation marks.
14. Click the OK button on the Function Arguments dialog box to complete the function.
15. Copy the IF function in cell R4 and paste it into the range R5:R18 using the Paste Formulas command.

Figure 3.14 "Completed Function Arguments Dialog Box for the IF Function" shows the completed Function Arguments dialog box for the IF function. Notice that the results of the function are displayed in the dialog box. Since the value in cell Q4 is greater than 12, the word Long will be displayed in cell R4.

Figure 3.15 "IF Function Output" shows the completed Long/Short Indicator column on the Investment Detail worksheet. Notice the word Short is displayed for any investment held less than twelve months.

The OR Function

The OR function is similar to the IF function in that it uses a logical test to evaluate the contents of a cell location. However, the OR function allows you to define several logical tests as opposed to just one. If one of the logical tests is true, the output of the function will be the word TRUE. If all the logical tests are false, the output of the function will be the word FALSE. This differs from the IF function because the output of the function is only the word TRUE or the word FALSE. As a result, the OR function is commonly used within the IF function to enable specific outputs to be defined.

We will use the OR function in the Performance Indicator column on the Investment Detail worksheet. The purpose of this column is to identify any investment where either the Unrealized Gain/Loss is less than zero or the Target vs. Actual Growth Rate is less than –1%. We will use the function in the logical test of an IF function so we can define a specific output based on the results of the OR function. However, we will first demonstrate how the OR function works by itself, which is outlined in the following steps:

1. Click cell X4 on the Investment Detail worksheet.
2. Type an equal sign (=).
3. Type the function name OR followed by an open parenthesis (().
4. Click cell S4 on the Investment Detail worksheet.
5. Type the less than symbol (<) followed by a zero. This completes the first logical test, which is evaluating if the value in cell S4 is less than zero.
6. Type a comma. This advances the function to a second logical test.
7. Click cell W4 on the Investment Detail worksheet.
8. Type the less than symbol (<) followed by −1%. Be sure to include the minus sign and percent symbol. This completes the second logical test, which is evaluating if the value in cell W4 is less than –1%.
9. Type a closing parenthesis ()) and press the ENTER key on your keyboard.
10. Copy the OR function in cell X4 and paste it into the range X5:X18 using the Paste Formulas command.

Figure 3.16 "Completed OR Function by Itself" shows the construction and result of the OR function by itself. Notice that the only output of the function is the word TRUE or the word FALSE. If either the Unrealized Gain/Loss is less than zero or the Target vs. Actual Growth Rate is less than −1%, the function shows the word TRUE. However, these descriptions will not be helpful for the person using this worksheet. Displaying the words OK or Warning would be far more helpful in identifying investments that need to be evaluated. We can do this if we use the OR function in the logical test argument of the IF function. The following steps explain how to accomplish this:

1. Highlight the range X4:X18 on the Investment Detail worksheet and press the DELETE key on your keyboard. We are going to start over by creating an IF function.
2. Click cell X4 on the Investment Detail worksheet.
3. Type an equal sign (=).
4. Type the function name IF followed by an open parenthesis (().
5. Type the function name OR followed by an open parenthesis ((). The OR function is being placed into the logical_test argument of this IF function.
6. Click cell S4 on the Investment Detail worksheet.
7. Type the less than symbol (<) followed by a zero.
8. Type a comma. This advances the function to a second logical test.
9. Click cell W4 on the Investment Detail worksheet.
10. Type the less than symbol (<) followed by −1%.
11. Type a closing parenthesis ()).
12. Type an equal sign (=).
13. Type the word TRUE. Do not put the word inside quotation marks.
14. Type a comma. This completes the logical_test argument of the IF function. We can now go on to define the value_if_true and the value_if_false arguments. This will allow us to specify what the output of the function should be instead, using the OR function outputs of either TRUE or FALSE.
15. Type the word Warning. Be sure to enclose the word in quotation marks.
16. Type a comma. This will advance the function to the value_if_false argument.
17. Type the word OK. Be sure to enclose the word in quotation marks.
18. Type a closing parenthesis ())and press the ENTER key on your keyboard.
19. Copy the IF function in cell X4 and paste it into the range X5:X18 using the Paste Formulas command.

Figure 3.17 "OR Function in the Logical Test of the IF Function" shows the OR function within the logical_test argument of the IF function. The logical test of the IF function is now evaluating if the results of the OR function are true.

The AND Function

The AND function is almost identical to the OR function in that it is composed of only logical tests and produces one of two possible outputs: TRUE or FALSE. However, all logical tests defined for the AND function must be true in order to produce a TRUE output. If one logical test is false, the function will produce a FALSE output. We will use the AND function to complete the Buy/Sell Indicator column on the Investment Detail worksheet. This column will show either the word Buy or the words Hold or Sell based on the results of the logical test argument of an IF function. We will use the AND function to define the logical test argument of the IF function. The following steps explain how to accomplish this:

1. Click cell P4 on the Investment Detail worksheet.
2. Type an equal sign (=).
3. Type the function name IF followed by an open parenthesis (().
4. Type the function name AND followed by an open parenthesis ((). The AND function is being placed into the logical_test argument of this IF function.
5. Click cell N4 and then type the less than symbol (<</b>).
6. Type a minus sign (−) followed by the number 1 and a percent symbol: (−1%).
7. Type a comma. This advances the AND function to the second logical test.
8. Click cell S4.
9. Type a greater than symbol (>) followed by an equal sign (=). These symbols are used to evaluate if the value in a cell location is greater than or equal to a target value.
10. Type a zero followed by a closing parenthesis ()).

11. Type an equal sign (=) followed by the word TRUE. Do not enclose the word in quotation marks.

    Figure 3.18 "AND Function Placed in the Logical Test of an IF Function" shows the appearance of the AND function that has been added to the logical test of the IF function. The AND function will produce a true output if the value in cell N4 is <−1% and the value in cell S4 is greater than or equal to 0.

    Figure 3.18 AND Function Placed in the Logical Test of an IF Function

    
12. Type a comma. This advances the IF function to the value_if_true argument.
13. Type the word Buy enclosed in quotation marks as shown in Figure 3.19 "Results of the AND Function in the Logical Test Argument of an IF Function". If the Current vs. Target value is less than −1% and the Unrealized Gain/Loss is greater than or equal to zero, the function will show the word Buy. In other words, if the investment is less than the desired percentage for the total portfolio and it is currently not losing money, we will buy more of that investment so it is in line with the target percentage of the portfolio.
14. Type a comma.
15. Type the words Hold or Sell enclosed in quotation marks as shown in Figure 3.19 "Results of the AND Function in the Logical Test Argument of an IF Function". For all other investments that are not designated with a Buy indicator, the function will show the words Hold or Sell. This indicates that an investment could either be held or sold.
16. Type a closing parenthesis ()) and press the ENTER key on your keyboard.
17. Copy the IF function in cell P4 and paste it into the range P5:P18 using the Paste Formulas command.
18. Increase the width of Column P to 12 points.

Figure 3.19 "Results of the AND Function in the Logical Test Argument of an IF Function" shows the results of the completed AND function within an IF function after it is copied and pasted into the range P5:P18.

Nested IF Functions

When constructing the IF function, the logical test can produce only two potential outcomes when evaluating the data in a cell. In addition, the function can produce only two possible outputs, which are defined in the value_if_true and value_if_false arguments. However, there may be situations when you need to test for several possible outcomes, which may require more than two possible outputs. To accomplish this, you need to create a nested IF functionUsed when more than two tests and two outputs are required when using the IF function. A nested IF function is when the value_if_true or value_if_false arguments of an IF function are defined with another IF function.. A nested IF function is when either the value_if_true or value_if_false arguments are defined with another IF function.

For the Personal Investment workbook, a nested IF function is required to complete the Rebalance Indicator column (Column O) on the Investment Detail worksheet (see Figure 3.19 "Results of the AND Function in the Logical Test Argument of an IF Function"). The purpose of this column is to indicate where the portfolio needs to be rebalanced. Looking at the Current vs. Target column (Column N) shown in Figure 3.19 "Results of the AND Function in the Logical Test Argument of an IF Function", you can see that several investments have a significant negative number where the investment value has fallen below the target percentage for the portfolio. Other investments have a significant positive number where the investment has exceeded the target percentage for the portfolio. For this portfolio, a number greater than 1% or less than –1% will be considered significant. Therefore, we will need to assess three possible outcomes when creating a logical test that evaluates the values in Column N. The first test will be if the value is greater than 1%. The second test will be if the value is less than –1%. The third test will be if both the first test and the second test are false. This is why we need to construct a nested IF function to produce the outputs in the Rebalance Indicator column. The following steps explain how to accomplish this:

1. Click cell O4 on the Investment Detail worksheet.
2. Type an equal sign (=).
3. Type the function name IF followed by an open parenthesis (().
4. Click cell N4.
5. Type the greater than symbol (>) followed by the number 1%. It is important to use the percent symbol (%) after the number 1. If you omit the percent symbol, Excel will test if the value in cell N4 is greater than 100%.
6. Type a comma.
7. Type the word Rebalance inside quotation marks. When using text data to define any of the arguments for the IF function, the text must be placed inside quotation marks.
8. Type a comma.
9. Start another IF function by typing the function name IF followed by an open parenthesis (().
10. Click cell N4.
11. Type the less than symbol (<) followed by −1%.
12. Type a comma.
13. Type the word Rebalance inside quotation marks.
14. Type a comma.
15. Type the word OK inside quotation marks.
16. Type two closing parentheses ())). Since two IF functions were started, there are two open parentheses in the function. As a result, we need to add two closing parentheses; otherwise, Excel will produce an error message stating that a closing parenthesis is missing.
17. Press the ENTER key on your keyboard.
18. Copy the nested IF function in cell O4 and paste it into the range O5:O18 using the Paste Formulas command.

Figure 3.20 "Completed Nested IF Function" shows how the completed nested IF function should appear in cell O4 of the Investment Detail worksheet. In addition, we see the results of the function after it was pasted into the range O5:O18. Notice that for any investment where the Current vs. Target value is between plus or minus 1%, the word OK appears.

Basic Conditional Formats

A feature related to the skills used to create logical functions is conditional formatting. Conditional formatsAn Excel feature that applies formatting commands to cell locations based on the cell contents. A basic conditional formatting rule will utilize a logical test to evaluate the contents of a cell location. If the results of the logical test are true, Excel will apply the designated formatting commands to the cell location. allow you to apply a variety of formatting treatments based on the contents of a cell location. A logical test similar to the ones used in the IF, AND, and OR functions is used to evaluate the contents of a cell and apply a designated formatting treatment. For example, looking at Figure 3.20 "Completed Nested IF Function", you will notice that the Unrealized Gain/Loss column is formatted using the accounting number format. Negative numbers are enclosed in parentheses. However, to make these numbers stand out, we can use conditional formatting to change the font color to red. We will do this for the Unrealized Gain/Loss and Percent Gain/Loss columns. The following steps explain how conditional formats are applied to the cell locations in these columns:

1. Highlight the range S4:T18 on the Investment Detail worksheet.
2. Click the Conditional Formatting button in the Styles group of commands on the Home tab of the Ribbon.

3. Click the New Rule command from the list of options (see Figure 3.21 "Conditional Formatting Options List"). This will open the New Formatting Rule dialog box.

   Figure 3.21 Conditional Formatting Options List

   
4. At the top of the New Formatting Rule dialog box, you will find a list of options under the Select a Rule Type heading. Click the second option that states “Format only cells that contain.”
5. In the lower portions of the New Formatting Rule dialog box, you will see several drop-down boxes under the heading Edit the Rule Description. Make sure the first drop-down box is set to Cell Value.
6. Click the second drop-down box in the Edit the Rule Description section of the New Formatting Rule dialog box and select the “less than” option.
7. Click in the input box, which is next to the drop-down box that was set in the previous step, and type a zero. This completes the logical test of the conditional format, which is going to evaluate if the value in any of the cells in the range S4:T18 is less than zero.
8. Click the Format button, which is near the bottom of the New Formatting Rule dialog box. This will open the Format Cells dialog box.
9. Click the drop-down box in the Color section of the Format Cells dialog box and select the red square from the color palette (see Figure 3.22 "Format Cells Dialog Box").
10. Click the OK button at the bottom of the Format Cells dialog box.
11. Click the OK button at the bottom of the New Formatting Rule dialog box. This completes the Conditional Formatting rule that will be applied to cells in the range S4:T18.

Figure 3.22 "Format Cells Dialog Box" shows the Format Cells dialog box. This opens when the Format button is clicked on the New Formatting Rule dialog box. Notice the tabs running across the top of the dialog box. All formatting features in Excel are grouped by category, which can be accessed by clicking the related tab on the Format Cells dialog box. You will see some of the formatting commands in light grey. This indicates that these commands cannot be used with the Conditional Formatting feature. You can use the Format Cells dialog box to apply any formatting features by clicking the Format Cells dialog button on the Home tab of the Ribbon (see Figure 3.21 "Conditional Formatting Options List").

Figure 3.23 "New Formatting Rule Dialog Box" shows the final settings for the New Formatting Rule dialog box. It is important to note that the “Format only cells that contain” option was selected in the New Formatting Rule dialog box to set a basic logical test that can be used to apply formatting commands automatically based on the values in cell locations.

Figure 3.24 "Conditional Format Applied to the Range S4:T18" shows the results of the conditional formatting rule that was applied to the range S4:T18. Notice the font color is automatically changed to red for negative numbers.

The COUNTIF Function

The COUNTIF function differs from the regular COUNT function in two ways. First, the regular COUNT function counts only the number of cells in a range that contain numeric data. The COUNTIF function counts the number of cells in a range that contain numeric or text data. Second, the COUNTIF function allows you to selectively count the cells in a range based on specific criteria.

The COUNTIF function contains two arguments: range and criteria. The range argument is defined with the range of cells that will be counted. The criteria argument is defined with the criteria that will be used to decide if a cell in the range should be included in the output of the function. The following steps explain how we can use the COUNTIF function to calculate the number of investments by investment type on the Portfolio Summary worksheet:

1. Click cell B4 on the Portfolio Summary worksheet.
2. Click the Formulas tab of the Ribbon.
3. Click the More Functions button in the Function Library group of commands.
4. Place the mouse pointer over the Statistical option from the drop-down list.
5. Click the scroll down arrow on the second drop-down list to find the COUNTIF function (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").

6. Click the COUNTIF function. This will open the Function Arguments dialog box.

   Figure 3.25 Selecting the COUNTIF Function from the Function Library

   
7. Click the Collapse Dialog button next to the Range argument on the Function Arguments dialog box (see Figure 3.26 "Completed Function Arguments Dialog Box for the COUNTIF Function").
8. Click the Investment Detail worksheet tab.
9. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
10. Click in the Range argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range. Alternatively, place the insertion point after the 4 in cell reference A4 and press the F4 key on your keyboard. Then place the insertion point after the 8 in cell reference A18 and press the F4 key. This will add the $ to the appropriate positions automatically.
11. Press the TAB key on your keyboard to advance to the next argument, which is the Criteria argument. Then type the cell location A4. The criteria for the function will be the investment type entered into cell A4 on the Portfolio Summary worksheet.

12. Click the OK button at the bottom of the Function Arguments dialog box. Figure 3.26 "Completed Function Arguments Dialog Box for the COUNTIF Function" shows the completed Function Arguments dialog box for the COUNTIF function. Notice the absolute references that were placed on each cell location in the range that was used to define the Range argument. The Criteria argument is defined with the cell A4, which means the function will only count cell locations in the range A4:A18 where the contents in the cell match the contents in cell A4.

    Figure 3.26 Completed Function Arguments Dialog Box for the COUNTIF Function

    
13. Copy the function in cell B4 and paste it into the range B5:B7 using the Paste Formulas command.
14. Enter a SUM function in cell B8 that sums the values in the range B4:B7.

Figure 3.27 "COUNTIF Function Output in the Portfolio Summary Worksheet" shows the results of the COUNTIF function after it is pasted into the range B5:B7. Because of relative referencing, the cell location used in the criteria argument is changed after the function is pasted into the range B5:B7. For example, in cell B6, the function is counting the cell locations in the range A4:A18 where the contents match the contents of cell A6. This allows you to use the function to count the number of investments per investment type. As shown in the figure, the range B4:B7 now shows the number of investments in this portfolio by investment type.

The AVERAGEIF Function

The AVERAGEIF function performs the identical mathematical calculation as the regular AVERAGE function. However, similar to the COUNTIF function, it allows you to define criteria that will select cells in a range that will be used in the function output. The AVERAGEIF function differs from the COUNTIF function in that it allows you to define two cell ranges instead of one. The first range pertains to the criteria that will be used to select cells for the function output. The second range contains the values that will be used to calculate the arithmetic mean. Table 3.8 "Arguments for the AVERAGEIF and SUMIF Functions" provides definitions for the arguments contained in the AVERAGEIF and SUMIF functions.

The AVERAGEIF function will be used in the Portfolio Summary worksheet to calculate the average length of time that investments for each investment type are held. The following steps explain how to add this function to the worksheet:

1. Click cell C4 on the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the More Functions button in the Function Library group of commands.
4. Place the mouse pointer over the Statistical option from the drop-down list (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
5. Click the AVERAGEIF function, which will be near the top of the list of functions. This opens the Function Arguments dialog box.
6. Click the Collapse Dialog button next to the Range argument on the Function Arguments dialog box (see Figure 3.28 "Defined Arguments for the AVERAGEIF Function").
7. Click the Investment Detail worksheet tab.
8. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
9. Click in the Range argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
10. Press the TAB key on your keyboard to advance to the Criteria argument and type the cell location A4. The criteria for the function will be the investment type entered into cell A4 on the Portfolio Summary worksheet.
11. Click the Collapse Dialog button next to the Average_range argument on the Function Arguments dialog box (see Figure 3.28 "Defined Arguments for the AVERAGEIF Function").
12. Click the Investment Detail worksheet tab.
13. Highlight the range Q4:Q18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
14. Click in the Average_range argument input box and place an absolute reference on the range Q4:Q18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.

15. Click the OK button at the bottom of the Function Arguments dialog box.

    Figure 3.28 "Defined Arguments for the AVERAGEIF Function" shows the Function Arguments dialog box for the AVERAGEIF function that will be input into cell C4. Notice that absolute references are placed on the cell locations used to define the Range and Average_range arguments. The function will evaluate the cells in the range A4:A18 using the value that exists in cell A4 on the Portfolio Summary worksheet. When a cell in the range A4:A18 meets the criteria, the function will pull the cell location in the same row from the range Q4:Q18 and include it in the average calculation.

    Figure 3.28 Defined Arguments for the AVERAGEIF Function

    
16. Copy the function in cell C4 and paste it into the range C5:C7 using the Paste Formulas option.
17. Type an equal sign (=) in cell C8.
18. Click the Investment Detail worksheet tab. Then click cell Q19 and press the ENTER key on your keyboard.

Figure 3.29 "AVERAGEIF Function Output on the Portfolio Summary Worksheet" shows the output of the AVERAGEIF function in the Average Months Owned column on the Portfolio Summary worksheet. The function calculates the average months owned in Column Q on the Investment Detail worksheet where the investment type is equal to the description entered in the range A4:A7 on the Portfolio Summary worksheet.

The SUMIF Function

The SUMIF function performs the same mathematical calculation as the regular SUM function. However, similar to the AVERAGEIF function, this function allows you to select specific cells from a range that will be used in the output. The arguments for the SUMIF function are identical to the AVERAGEIF function (see Table 3.8 "Arguments for the AVERAGEIF and SUMIF Functions"). We will use the SUMIF function in two columns on the Portfolio Summary worksheet. The first column will show the total investment cost for each investment type. The second column will show the total current value for each investment type. This will allow us to calculate the total annual growth rate for each investment type. The following steps explain how we will use this function to complete the first column:

1. Click cell D4 on the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the Math & Trig button in the Function Library group of commands (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
4. Select the SUMIF function from the drop-down list. Use the scroll bar to scroll down to find the SUMIF function.
5. Click the Collapse Dialog button next to the Range argument on the Function Arguments dialog box (see Figure 3.30 "Defined Arguments for the First SUMIF Function on the Portfolio Summary Worksheet").
6. Click the Investment Detail worksheet tab.
7. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
8. Click in the Range argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
9. Press the TAB key on your keyboard to advance to the Criteria argument and type the cell location A4. The criteria for the function will be the investment type entered into cell A4 on the Portfolio Summary worksheet.

10. Click the Collapse Dialog button next to the Sum_range argument on the Function Arguments dialog box (see Figure 3.30 "Defined Arguments for the First SUMIF Function on the Portfolio Summary Worksheet").

    Figure 3.30 Defined Arguments for the First SUMIF Function on the Portfolio Summary Worksheet

    
11. Click the Investment Detail worksheet tab.
12. Highlight the range G4:G18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
13. Click in the Sum_range argument input box and place an absolute reference on the range G4:G18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
14. Click the OK button at the bottom of the Function Arguments dialog box.
15. Copy the function in cell D4 and paste it into the range D5:D7 using the Paste Formulas option.
16. Enter a regular SUM function into cell D8 on the Portfolio Summary worksheet to calculate the sum of the values in the range D4:D7.

Figure 3.30 "Defined Arguments for the First SUMIF Function on the Portfolio Summary Worksheet" shows how the SUMIF arguments were defined for the Total Purchase Cost column on the Portfolio Summary worksheet. Notice that the row numbers are identical in the range used to define the Range argument and the Sum_range argument.

The following steps explain how to add the SUMIF function to the second column on the Portfolio Summary worksheet:

1. Click cell E4 on the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the Math & Trig button in the Function Library group of commands (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
4. Select the SUMIF function from the drop-down list. Use the scroll bar to scroll down to find the SUMIF function.
5. Click the Collapse Dialog button next to the Range argument on the Function Arguments dialog box (see Figure 3.30 "Defined Arguments for the First SUMIF Function on the Portfolio Summary Worksheet").
6. Click the Investment Detail worksheet tab.
7. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
8. Click in the Range argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
9. Press the TAB key on your keyboard to advance to the Criteria argument and type the cell location A4.
10. Click the Collapse Dialog button next to the Sum_range argument on the Function Arguments dialog box (see Figure 3.30 "Defined Arguments for the First SUMIF Function on the Portfolio Summary Worksheet").
11. Click the Investment Detail worksheet tab.
12. Highlight the range K4:K18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
13. Click in the Sum_range argument input box and place an absolute reference on the range K4:K18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
14. Click the OK button at the bottom of the Function Arguments dialog box.
15. Copy the function in cell E4 and paste it into the range E5:E7 using the Paste Formulas option.
16. Enter a regular SUM function into cell E8 on the Portfolio Summary worksheet to calculate the sum of the values in the range E4:E7.

Figure 3.31 "SUMIF Function Outputs in the Portfolio Summary Worksheet" shows the results of the SUMIF function in the Total Purchase Cost and Current Value columns in the Portfolio Summary worksheet.

A formula can now be added to show the annual growth for each investment category. The following steps explain how to add this formula to the Portfolio Summary worksheet:

1. Click cell F4 on the Portfolio Summary worksheet.
2. Type an equal sign (=) followed by two open parenthesis ((().
3. Click cell E4 and type a minus sign (−).
4. Click cell D4 and type a closing parenthesis ()).
5. Type a slash (/) for division and click cell D4.
6. Type a closing parenthesis ()). This completes the first part of the formula, which is calculating the growth rate between the Total Purchase Cost (cell D4) and the Current Value (cell E4).
7. Type a slash (/) for division followed by an open parenthesis (().
8. Click cell C4, which is the Average Months Owned.
9. Type a slash (/) for division and the number 12. This part of the formula converts the number of months owned to years by dividing it by 12. This result is being divided into the growth rate, which will then show the average growth per year.
10. Type a closing parenthesis ()) and press the ENTER key on your keyboard.
11. Copy the formula in cell F4 and paste it into the range F5:F8 using the Paste Formulas command.

Figure 3.32 "Completed Annual Growth Column in the Portfolio Summary Worksheet" shows the results of the statistical IF functions that were added to the Total Summary section of the Portfolio Summary worksheet. The statistical IF functions used on this worksheet allowed us to group the details in the Investment Detail worksheet by investment type. Once this was accomplished, we added a formula to show the annual growth rate by investment type.

The COUNTIFS Function

Up to this point, the statistical IF functions that were demonstrated provided the ability to define one criteria or logical test used to select cells from a targeted range. The next set of statistical functions that will be demonstrated provides the ability to define multiple sets of criteria for selecting cells from a targeted range. We will begin with the COUNTIFS function.

It is easy to distinguish the difference between a statistical IF function that allows one criteria argument to be defined and one that allows multiple criteria arguments. If the IF at the end of the function name is plural, you can define multiple sets of criteria arguments. Therefore, the COUNTIFS function provides the option of defining multiple sets of criteria for selecting cells from a targeted range that will be used in the function output. The arguments for the COUNTIFS function are established in pairs. For example, the first arguments for the function are Criteria_range1 and Criteria1. The function will use the Criteria1 argument to select cells in the Criteria_range1 argument. A second pair of arguments, Criteria_range2 and Criteria2, can be defined to select a subset of cell locations that were selected in the Criteria_range1 and Criteria1 arguments. This process can be repeated for several pairs of criteria arguments. We will continue to work on the Portfolio Summary worksheet by adding the COUNTIFS function to count the number of poor performing investments by investment type. The following steps explain how to add this function to the worksheet:

1. Click cell B11 on the Portfolio Summary worksheet.
2. Click the Formulas tab of the Ribbon.
3. Click the More Functions button in the Function Library group of commands.
4. Place the mouse pointer over the Statistical option from the drop-down list.
5. Click the scroll down arrow on the second drop-down list to find the COUNTIFS function (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
6. Click the COUNTIFS function. This will open the Function Arguments dialog box.
7. Click the Collapse Dialog button next to the Criteria_range1 argument on the Function Arguments dialog box (see Figure 3.33 "Defined Arguments for the COUNTIFS Function").
8. Click the Investment Detail worksheet tab.
9. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
10. Click in the Criteria_range1 argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
11. Press the TAB key on your keyboard to advance to the Criteria1 argument and type the cell location A11. The criteria for the function will be the investment type that is entered into cell A11 on the Portfolio Summary worksheet. You will notice that when you define this argument, the Criteria_range2 argument will appear on the Function Arguments dialog box.
12. Click the Collapse Dialog button next to the Criteria_range2 argument on the Function Arguments dialog box (see Figure 3.33 "Defined Arguments for the COUNTIFS Function").
13. Click the Investment Detail worksheet tab.
14. Highlight the range W4:W18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
15. Click in the Criteria_range2 argument input box and place an absolute reference on the range W4:W18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
16. Press the TAB key on your keyboard to advance to the Criteria2 argument.
17. Type an open quotation mark followed by the logical test <−1% and then type a closing quotation mark (“<−1%”). The second criterion for this function is a logical test that will identify cell locations where the value is less than −1%. For the purposes of this exercise, a poor performing investment is one that is below the target growth rate by more than 1%.
18. Click the OK button at the bottom of the Function Arguments dialog box.
19. Copy the function in cell B11 and paste it into the range B12:B14 using the Paste Formulas command.
20. Enter a SUM function in cell B15 on the Portfolio Summary worksheet that sums the values in the range B11:B14.

Figure 3.33 "Defined Arguments for the COUNTIFS Function" shows the completed arguments for the COUNTIFS function in the Function Arguments dialog box. Notice the scroll bar that appears on the right side of the Function Arguments dialog box. This allows you to scroll through and define multiple pairs of criteria arguments for the function.

Figure 3.34 "Outputs for the COUNTIFS Functions" shows the output of the COUNTIFS function on the Portfolio Summary worksheet. The criteria established for the COUNTIFS function shows that there are a total of seven investments that are underperforming in the portfolio.

The AVERAGEIFS Function

The AVERAGEIFS function is similar to the COUNTIFS function in that multiple sets of criteria can be defined instead of one. However, the arguments for the AVERAGEIFS function are slightly different from those for the COUNTIFS function. Table 3.9 "Arguments for the AVERAGEIFS and SUMIFS Functions" provides definitions for the arguments of the AVERAGEIFS and the SUMIFS functions.

The AVERAGEIFS function will be used to calculate the average months of ownership for poor performing investments in the portfolio. The following steps explain how to add this function to the Portfolio Summary worksheet:

1. Click cell C11 on the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the More Functions button in the Function Library group of commands.
4. Place the mouse pointer over the Statistical option from the drop-down list (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
5. Click the AVERAGEIFS function near the top of the list of functions. This will open the Function Arguments dialog box.
6. Click the Collapse Dialog button next to the Average_range argument on the Function Arguments dialog box (see Figure 3.35 "Completed Arguments for the AVERAGEIFS Function").
7. Click the Investment Detail worksheet tab.
8. Highlight the range Q4:Q18 on the Investment Detail worksheet and press the ENTER key on your keyboard. Selected cells from this range will be averaged by the function based on the defined criteria in ensuing arguments.
9. Click in the Average_range argument input box and place an absolute reference on the range Q4:Q18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
10. Click the Collapse Dialog button next to the Criteria_range1 argument on the Function Arguments dialog box (see Figure 3.35 "Completed Arguments for the AVERAGEIFS Function").
11. Click the Investment Detail worksheet tab.
12. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard. Once the Criteria_range1 argument is defined, the Criteria1 argument will appear in the Function Arguments dialog box.
13. Click in the Criteria_range1 argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
14. Press the TAB key on your keyboard to advance to the Criteria1 argument and type the cell location A11. The criteria for the function will be the investment type entered into cell A11 on the Portfolio Summary worksheet. You will notice that as you define this argument, the Criteria_range2 argument will appear on the Function Arguments dialog box.
15. Click the Collapse Dialog button next to the Criteria_range2 argument on the Function Arguments dialog box (see Figure 3.35 "Completed Arguments for the AVERAGEIFS Function").
16. Click the Investment Detail worksheet tab.
17. Highlight the range W4:W18 on the Investment Detail worksheet and the press the ENTER key on your keyboard.
18. Click in the Criteria_range2 argument input box and place an absolute reference on the range W4:W18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
19. Press the TAB key on your keyboard to advance to the Criteria2 argument.
20. Type an open quotation mark followed by the logical test <−1% and then type a closing quotation mark (“<−1%”). The second criterion for this function is a logical test that will identify cell locations where the value is less than −1%. For the purposes of this exercise, a poor performing investment is one that is below the target growth rate by more than 1%.
21. Click the OK button at the bottom of the Function Arguments dialog box.

22. Copy the function in cell C11 and paste it into the range C12:C14 using the Paste Formulas command.

    Figure 3.35 "Completed Arguments for the AVERAGEIFS Function" shows the defined arguments for the AVERAGEIFS function. Notice that two sets of criteria arguments are defined. Values that meet all criteria defined in the function will be selected from the range Q4:Q18.

    Figure 3.35 Completed Arguments for the AVERAGEIFS Function

    
23. Enter an AVERAGEIF function in cell C15 by typing an equal sign (=) followed by the function name AVERAGEIF followed by an open parenthesis (().
24. Click the Investment Detail worksheet tab and highlight the range W4:W18 to define the Range argument. Type a comma.
25. Type the following to define the criteria argument: “<–1%”. Type a comma.
26. Highlight the range Q4:Q18 to define the [Average_range] argument. Then type a closing parenthesis ()) and press the ENTER key on your keyboard.

Figure 3.36 "Results of the AVERAGEIFS Function" shows the results of the AVERAGEIFS function in the Portfolio Summary worksheet. The function shows the average months of ownership for the poor performing investments by investment type.

The SUMIFS Function

The SUMIFS function is similar to the AVERAGEIFS function in that multiple criteria arguments can be defined to select cells from a targeted range (see Table 3.9 "Arguments for the AVERAGEIFS and SUMIFS Functions"). The function will use the selected cells from this targeted range to calculate a total or sum. The SUMIFS function will be used to complete the Total Purchase Cost and Current Value columns in the Poor Performing Investments section of the Portfolio Summary worksheet. The following steps explain how to construct this function for the Total Purchase Cost column:

1. Click cell D11 on the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the Math & Trig button in the Function Library group of commands (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
4. Select the SUMIFS function from the drop-down list. Use the scroll bar to scroll down to find the SUMIFS function. This will open the Function Arguments dialog box.
5. Click the Collapse Dialog button next to the Sum_range argument on the Function Arguments dialog box (see Figure 3.37 "Completed Arguments for the SUMIFS Function").
6. Click the Investment Detail worksheet tab.
7. Highlight the range G4:G18 on the Investment Detail worksheet and press the ENTER key on your keyboard. Selected cells from this range will be summed based on the defined criteria in ensuing arguments.
8. Click in the Sum_range argument input box and place an absolute reference on the range G4:G18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
9. Click the Collapse Dialog button next to the Criteria_range1 argument on the Function Arguments dialog box (see Figure 3.37 "Completed Arguments for the SUMIFS Function").
10. Click the Investment Detail worksheet tab.
11. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard. Once the Criteria_range1 argument is defined, the Criteria1 argument will appear in the Function Arguments dialog box.
12. Click in the Criteria_range1 argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
13. Press the TAB key on your keyboard to advance to the Criteria1 argument and type the cell location A11. The criteria for the function will be the investment type that is entered into cell A11 on the Portfolio Summary worksheet. You will notice that as soon as you define this argument, the Criteria_range2 argument will appear on the Function Arguments dialog box.
14. Click the Collapse Dialog button next to the Criteria_range2 argument on the Function Arguments dialog box (see Figure 3.37 "Completed Arguments for the SUMIFS Function").
15. Click the Investment Detail worksheet tab.
16. Highlight the range W4:W18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
17. Click in the Criteria_range2 argument input box and place an absolute reference on the range W4:W18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
18. Press the TAB key on your keyboard to advance to the Criteria2 argument.
19. Type an open quotation mark followed by the logical test <−1% and then type a closing quotation mark (“<−1%”). The second criterion for this function is a logical test that will identify cell locations where the value is less than −1%. For the purposes of this exercise, a poor performing investment is one that is below the target growth rate by more than 1%.
20. Click the OK button at the bottom of the Function Arguments dialog box.
21. Copy the function in cell D11 and paste it into the range D12:D14 using the Paste Formulas command.
22. Enter a regular SUM function in cell D15 on the Portfolio Summary worksheet that sums the values in the range D11:D14.

Figure 3.37 "Completed Arguments for the SUMIFS Function" shows the defined arguments for the SUMIFS function. Values that meet all criteria defined in the function will be selected from the range G4:G18. Notice that the results for each argument of the function are shown along the right side of the Collapse Dialog buttons.

Figure 3.38 "SUMIFS Function Output for the Total Purchase Cost Column" shows the results of the SUMIFS function used to complete the Total Purchase Cost column. In total, over $45,000 was invested in funds and stocks that are not meeting the performance goals of the portfolio.

In addition to the Total Purchase Cost column, the SUMIFS function will also be used to complete the Current Value column for the Poor Performing Investments section on the Portfolio Summary worksheet. The following steps explain how to add the function to the worksheet to complete this column:

1. Click cell E11 on the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the Math & Trig button in the Function Library group of commands (see Figure 3.25 "Selecting the COUNTIF Function from the Function Library").
4. Select the SUMIFS function from the drop-down list. Use the scroll bar to scroll down to find the SUMIFS function. This will open the Function Arguments dialog box.
5. Click the Collapse Dialog button next to the Sum_range argument on the Function Arguments dialog box (see Figure 3.39 "Completed Function Arguments Dialog Box for the Second SUMIFS Function").
6. Click the Investment Detail worksheet tab.
7. Highlight the range K4:K18 on the Investment Detail worksheet and press the ENTER key on your keyboard. Selected cells from this range will be summed based on the defined criteria in ensuing arguments.
8. Click in the Sum_range argument input box and place an absolute reference on the range K4:K18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
9. Click the Collapse Dialog button next to the Criteria_range1 argument on the Function Arguments dialog box (see Figure 3.39 "Completed Function Arguments Dialog Box for the Second SUMIFS Function").
10. Click the Investment Detail worksheet tab.
11. Highlight the range A4:A18 on the Investment Detail worksheet and press the ENTER key on your keyboard. Once the Criteria_range1 argument is defined, the Criteria1 argument will appear in the Function Arguments dialog box.
12. Click in the Criteria_range1 argument input box and place an absolute reference on the range A4:A18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
13. Press the TAB key on your keyboard to advance to the Criteria1 argument and type the cell location A11. The criteria for the function will be the investment type entered into cell A11 on the Portfolio Summary worksheet.
14. Click the Collapse Dialog button next to the Criteria_range2 argument on the Function Arguments dialog box (see Figure 3.39 "Completed Function Arguments Dialog Box for the Second SUMIFS Function").
15. Click the Investment Detail worksheet tab.
16. Highlight the range W4:W18 on the Investment Detail worksheet and press the ENTER key on your keyboard.
17. Click in the Criteria_range2 argument input box and place an absolute reference on the range W4:W18. This is done by typing a dollar sign ($) in front of the column letter and row number for both cells in the range.
18. Press the TAB key on your keyboard to advance to the Criteria2 argument.
19. Type an open quotation mark followed by the logical test <−1% and then type a closing quotation mark (“<−1%”). The second criterion for this function is a logical test that will identify cell locations where the value is less than −1%. For the purposes of this exercise, a poor performing investment is one that is below the target growth rate by more than 1%.
20. Click the OK button at the bottom of the Function Arguments dialog box.
21. Copy the function in cell E11 and paste it into the range E12:E14 using the Paste Formulas command.
22. Enter a regular SUM function in cell E15 on the Portfolio Summary worksheet that sums the values in the range E11:E14 (see Figure 3.40 "SUMIFS Function Output for the Current Value Column").

Now that the Total Purchase Cost and Current Value columns are completed for the Poor Performing Investments section on the Portfolio Summary worksheet, we can add a formula to show the annual growth rate by investment type. Since this is the same formula that was used in the Total Summary section of the Portfolio Summary worksheet, we can just copy and paste it. The following steps explain how to do this:

1. Copy the formula in cell F4 on the Portfolio Summary worksheet.
2. Highlight the range F11:F15 on the Portfolio Summary worksheet.
3. Paste the formula using the Paste Formulas command.

Figure 3.41 "Completed Poor Performing Investments Section of the Portfolio Summary Worksheet" shows the completed Poor Performing Investments section on the Portfolio Summary worksheet. Notice that even though an investment is considered “poor performing” it does not mean that money is lost on the investment. As shown in the figure, only one investment in the International Stock Fund category is losing money, with an annual growth rate of −5.4%. However, the total annual growth rate for all investments in the Poor Performing section is 2.2% (see cell F15). This is less than half the growth rate for the overall portfolio, which is 6.2% (see cell F8). A final observation is that all the investments in the Domestic Stock Fund category are “poor performing.” The same number of investments in the Total Summary section appears in the Poor Performing Investments section. This completes the Portfolio Summary worksheet with the exception of one column. We will complete this column in the next section with a lookup function.

The VLOOKUP Function

The VLOOKUP function is typically used to access and display data located in another worksheet or workbook. The function can also be used to access and display data located in the same worksheet. This is a very powerful and versatile function because it eliminates the need to copy or recreate data that exists in other worksheets or workbooks. It is called a VLOOKUP function because the function will search vertically down the first column of a range of cells to find what is called a lookup value. This process is very similar to the statistical IF functions in Section 3.2 "Statistical IF Functions". You will recall that these functions used criteria to select cells from a range that was used in the mathematical output. The VLOOKUP function is essentially performing the same process; however, instead of selecting multiple cells from a range, the function is only looking for one specific cell location. Once the function finds the specific cell location, it will display the contents of that cell location or another cell location in the range. Before using the VLOOKUP function in the personal investment portfolio workbook, it is strongly recommended that you carefully read the definitions for the function arguments listed in Table 3.10 "Arguments for the VLOOKUP Function".

You may have noticed that on the Investment Detail worksheet, the Description column is blank (see Figure 3.2 "Investment Detail Worksheet"). Descriptions for several investments are included in the workbook in the Investment List worksheet as shown in Figure 3.42 "Investment List Worksheet". The VLOOKUP function will be used to search for a specific symbol in Column A of the Investment List worksheet and display the description for that symbol located in Column B. The following steps explain how to accomplish this:

1. Click cell C4 on the Investment Detail worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the Lookup & Reference button in the Function Library group of commands.
4. Select the VLOOKUP function from the list of functions. Use the scroll bar to scroll down to the bottom of the list. This will open the Function Arguments dialog box for the VLOOKUP function.
5. Click the Collapse Dialog button next to the Lookup_value argument on the Function Arguments dialog box.
6. Click cell B4 and press the ENTER key on your keyboard. The symbol in cell B4 is the lookup value that will be searched in the first column of the range defined for the Table_array argument.
7. Click the Collapse Dialog button next to the Table_array argument on the Function Arguments dialog box.
8. Click the Investment List worksheet tab.
9. Highlight the range A3:F23 on the Investment List worksheet and press the ENTER key on your keyboard. The function will look in Column A of this range for the lookup value.
10. Click in the input box for the Table_array argument and place an absolute reference on the range A3:F23. This is done by typing a dollar sign ($) in front of the column letter and row number of each cell location in the range.
11. Press the TAB key on your keyboard to advance to the Col_index_num argument and type the number 2. Once the function finds the lookup value in Column A of the range A3:F23, it will display the description that is in Column B of the same row.
12. Press the TAB key on your keyboard to advance to the Range_lookup argument and type the word FALSE. This will direct the function to search for only exact matches to lookup value.
13. Click the OK button at the bottom of the Function Arguments dialog box.
14. Copy the VLOOKUP function in cell C4 and paste it into the range C5:C18 using the Paste Formulas command.

Figure 3.43 "Completed Function Arguments Dialog Box for the VLOOKUP Function" shows the completed Function Arguments dialog box for the VLOOKUP function. Notice that the Range_lookup argument is defined with the word FALSE. This will direct the function to search for an exact match to the lookup value and will also direct the function to search the entire first column of the table array range. Finally, it is important to note the absolute reference on the table array range. This will prevent the table array range from changing when the function is pasted into other cell locations.

Figure 3.44 "Results of the VLOOKUP Function in the Investment Detail Worksheet" shows the results of the VLOOKUP function in the Investment Detail worksheet. The function is searching for each symbol in Column B of the Investment Detail worksheet in Column A of the Investment List worksheet. When the function finds a match, it will display whatever is in the cell location two columns to the right, or Column B, in the Investment List worksheet. For example, the symbol VDMIX, which is in cell B8 on the Investment Detail worksheet (see Figure 3.44 "Results of the VLOOKUP Function in the Investment Detail Worksheet"), is also in cell A15 on the Investment List worksheet (see Figure 3.42 "Investment List Worksheet"). As a result, the function is displaying whatever is in cell B15 on the Investment List worksheet, which is the description “Developed Markets.”

The HLOOKUP Function

The HLOOKUP function serves the same purpose as the VLOOKUP function. The HLOOKUP function can be used to display data from another worksheet or workbook. However, instead of searching for the lookup value vertically down the first column of the table array range, the HLOOKUP function searches horizontally across the first row of the table array range. When the function finds a match for the lookup value, it will display the contents in a cell location based on a row index number. This number designates how many rows below the first row of the table array range the function should display. Table 3.11 "Arguments for the HLOOKUP Function" provides a definition for each argument of the HLOOKUP function. It is best to review the definitions of these arguments carefully before using the function.

The HLOOKUP function will be used on the Portfolio Summary worksheet to display the benchmark growth rates in the range G4:G7. A benchmarkA value or qualitative example that can be used as a standard point of comparison. Results that are higher or better than a benchmark are typically considered positive, whereas results that are lower or worse than the benchmark are typically considered negative. is a value that can be used as a standard point of comparison. The Benchmarks worksheet contains growth rates at different year intervals for the benchmarks that will be used to compare the performance for each investment type (see Figure 3.45 "Benchmarks Worksheet"). For the purposes of this workbook, we will be comparing the growth rates for each investment type to the 5-year average growth rate for the benchmarks categories listed in the range H4:H7. The following steps explain how to construct the HLOOKUP function to display the 5-year benchmark values in the Portfolio Summary worksheet:

1. Click cell G4 in the Portfolio Summary worksheet.
2. Click the Formulas tab on the Ribbon.
3. Click the Lookup & Reference button in the Function Library group of commands.
4. Select the HLOOKUP function from the list of functions. This will open the Function Arguments dialog box for the HLOOKUP function.
5. Click the Collapse Dialog button next to the Lookup_value argument on the Function Arguments dialog box.
6. Click cell H4 and press the ENTER key on your keyboard. The description in cell H4 will be the lookup value that will be searched in the first row of the range defined for the Table_array argument.
7. Click the Collapse Dialog button next to the Table_array argument on the Function Arguments dialog box.
8. Click the Benchmarks worksheet tab.
9. Highlight the range B2:E6 on the Benchmarks worksheet and press the ENTER key on your keyboard. The function will look in Row 2 of this range for the lookup value.
10. Click in the input box for the Table_array argument and place an absolute reference on the range B2:E6. This is done by typing a dollar sign ($) in front of the column letter and row number of each cell location in the range.
11. Press the TAB key on your keyboard to advance to the Row_index_num argument and type the number 4. Once the function finds the lookup value in Row 2 of the range B2:E6, it will display the value that is in Row 5 of the same column. Remember that Row 2 is counted as Row 1 for the row index number in this example.
12. Press the TAB key on your keyboard to advance to the Range_lookup argument on the Function Arguments dialog box and type the word FALSE. This will direct the function to search for only exact matches of the lookup value.
13. Click the OK button at the bottom of the Function Arguments dialog box.
14. Copy the HLOOKUP function in cell G4 and paste it into the range G5:G7 using the Paste Formulas command.

Figure 3.46 "Completed Function Arguments Dialog Box for the HLOOKUP Function" shows the completed Function Arguments dialog box for the HLOOKUP function. The row index number 4 indicates that the function will display the contents of the cell location in the fourth row of the table array range.

Figure 3.47 "Completed Portfolio Summary Worksheet" shows the output of the HLOOKUP function. Notice that the output of the function in cell G4 is 6.0%. This is because the lookup value was defined with the entry in cell H4, which is the Barclays index. Looking at Figure 3.45 "Benchmarks Worksheet", if you count the first row of the table array range as Row 1, the value 6.03% is the fourth row in the Barclays column. Since the values in Column G on the Portfolio Summary worksheet are set to 1 decimal place, the value is displayed as 6.0%.

Web Queries

The final skill we will demonstrate in this chapter is the creation of a web query. Web queries allow you to import external data from a website into an Excel worksheet. We can enhance the personal investment portfolio demonstrated in this chapter through the use of web queries to import current stock prices from a website. Once a stock price is imported into the workbook, a cell reference can be added to the Investment Detail worksheet to reflect the most current price for an investment. It is important to note that you must establish an Internet connection before proceeding with this exercise. The following steps explain how to retrieve the current stock price for Microsoft from the Yahoo! Finance website and import it into the Price Data worksheet:

1. Click cell A2 on the Price Data worksheet.
2. Click the Data tab of the Ribbon.
3. Click the From Web button located in the Get External Data group of commands. This will open the New Web Query dialog box.
4. Type the following Internet address (URL) in the Address input box (see Figure 3.48 "New Web Query Dialog Box"): http://www.yahoo.com. Press the ENTER key on your keyboard after entering the URL.

5. Use the scroll bar on the right side of the New Web Query dialog box to locate the Finance link on the left navigation pane of the website. Click the Finance link (see Figure 3.48 "New Web Query Dialog Box").

   Figure 3.48 New Web Query Dialog Box

   
6. Locate the Get Quotes input box by using the scroll bar to scroll to the top of the website (see Figure 3.49 "Get Quotes Input Box on Yahoo! Finance").

7. Click in the Get Quotes input box, type the stock symbol MSFT, and press the ENTER key on your keyboard (see Figure 3.49 "Get Quotes Input Box on Yahoo! Finance").

   Figure 3.49 Get Quotes Input Box on Yahoo! Finance

   

8. When viewing the stock price data for MSFT, you will see several yellow boxes or tags with arrows (see Figure 3.50 "Selecting a Tag to Import Data from a Website"). These tags indicate blocks or tables of data that can be imported into a worksheet from a website. Click the yellow tag next to the Last Trade price. The yellow tag will turn green with a check mark inside of it.

   Figure 3.50 Selecting a Tag to Import Data from a Website

   

9. Click the Import button at the bottom of the New Web Query dialog box. This will open the Import Data dialog box, as shown in Figure 3.51 "Import Data Dialog Box".

   Figure 3.51 Import Data Dialog Box

   
10. Click the Properties button at the bottom of the Import Data dialog box (see Figure 3.51 "Import Data Dialog Box"). This will open the External Data Range Properties dialog box.
11. Click in the Name input box on the External Data Range Properties dialog box and delete the query name that is provided. Type the new query name Microsoft Stock Price.

12. Click the box next to the “Refresh every” property. Change the refresh minutes to 5. This means the query will automatically search the website every 5 minutes to retrieve an updated stock price for Microsoft (see Figure 3.52 "Final Settings for the External Data Range Properties Dialog Box").

    Figure 3.52 Final Settings for the External Data Range Properties Dialog Box

    
13. Click the option at the bottom of the External Data Range Properties dialog box that reads “Overwrite existing cells with new data, clear unused cells” (see Figure 3.52 "Final Settings for the External Data Range Properties Dialog Box"). It is important to select this option if you intend to add more than one web query to a worksheet or if you are using formulas in adjacent columns to a web query. This option will prevent the web query from deleting entire rows of data from the worksheet.
14. Click the OK button at the bottom of the External Data Range Properties dialog box.
15. Click the OK button at the bottom of the Import Data dialog box.
16. After the data is imported, click cell H17 on the Investment Detail worksheet and type an equal sign (=).
17. Click the Price Data worksheet tab.
18. Click cell B2 on the Price Data worksheet and press the ENTER key on your keyboard. This will display the price that is imported from the web query on the Investment Detail worksheet.
19. Figure 3.53 "Stock Price for Microsoft Imported into the Price Data Worksheet" shows the results of importing the Microsoft stock price from the Yahoo! Finance website. It is important to note that the data you retrieve from the website will be different from what is shown in this figure.