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Between the Sheets - Business Studies

Student Notes to Downloadable Spreadsheets

In the series of business studies modules, you will find definitions, explanations and examples on the following topics (the links below take you to the downloadable spreadsheets):

1. Introduction to balance sheet and income statement
2. Markups and margins
3. Gearing
4. Depreciation
5. Cost analysis
6. Cost volume profit analysis
7. Budgeting
8. Elasticity of demand
9. Profit maximisation

These supporting notes have been written by Duncan Williamson, the author of the modules. They are split into various sections to help you as you work through the spreadsheets.

• Learning objectives of the modules
• Objectives
• Solutions to problems
• Calculation questions
• Graphical questions
• Additional problems
• Other help
• Finally

Learning objectives of the modules

When you have worked through a module, you should be able to

1. understand the ideas in them; and
2. successfully work through the numerical aspects of the topics

Although these modules do not contain everything you need to know about any of the subjects, I have tried to give as much explanation as possible of the key features built into them. I have also tried to take you step by step through any calculations they need to do.

So, what's in the modules is good but there is still the need for you to read more about depreciation, more about cost volume profit analysis and more about profit maximisation and more about ...

Student objectives

In addition to the learning objectives, there are always the objectives that a student needs to bear in mind. You need to ask yourself the following to start with, "Why should I use these modules?" Here are a few ideas that should help you to answer this question.

Firstly, these modules are a bonus that can help you out in a few ways. Textbooks are fine, the television and radio are fine as additional resources. Case studies and past examination questions are also fine and so is project work. However, these modules can help you in some or all of the following ways:

1. They are new and contain aspects of the topics that you might find challenging and that can go over again and again.
2. When you work through any of the calculations, the spreadsheet has been programmed to tell you whether your answer is right or wrong.
3. The spreadsheet is tireless and won't get grumpy and cross with you!
4. If you are interested in spreadsheeting as well as accounting and economics, you will find examples here that will help you with your own work. Take a look at some of the formulae, functions and features of these spreadsheets and you might find a few things that you can use in your own work. For example,
   1. Have you ever tried to put into a spreadsheet how a business works? Well, just have a look at the Master Budget module and you'll see that: it's simplified but still realistic.
   2. Here are a couple for geeks: how about the structure of the following formula that sits silently and invisibly waiting for your answer? =IF(C9="","",IF(C9=B9-B8,"Good","Read the comment in cell C8")); and the use of concatenation?: =Workings!A1&" Budgeted Income Statement"
5. You might be interested in spreadsheet model building, such as preparing a master budget. Working through these modules can give you some ideas here. Cutting and pasting from here to there can be an ideal solution to some of your problems
6. Maybe you want some examples for revision, or even a project: here you have some fully worked examples and graphics that you can print out whenever you want.
7. The modules give you an excuse to build some computer time into your work.
8. It could just be that the subjects in these modules are exactly the ones that you need to work a bit harder at. So, they might give you with some extra materials to help you turn a C grade into a B or a B grade into an A.
9. Finally, you might find the module simply plain old riveting!

Solutions to problems

You should find that the solutions to most of the questions given in these modules are not too difficult to solve providing you work through these modules sheet by sheet and step by step. I have to say, though, that there are one or two examples that probably will take you more time than some of the others. If you can't solve these problems first time, try again. If you still can't do them, ask your teacher for the answers! If you don't have a teacher … you have e-mail, don't you?

Calculation questions

For the calculation questions, I have used a very simple idea to try to make your work as efficient as possible. If the spreadsheet asks you to answer a calculation question, then just look for the yellow cells nearby to put your answer in. You will find, anyway, that if you try to put your answer in the wrong place, Excel will tell you that you can't. I have password protected the modules mainly to stop you trying to put your answers in the wrong place.

Once you have found the cell, you are free just to type in your answer or type in a formula if you can and get Excel to work it out: either way, it's up to you how you answer the questions. If you answer right, Excel says something like "Good" or "well done"; if your answer's wrong, Excel says "Sorry, try again" or something equally cheesy.

Graphical questions

In some of the modules, you are asked to answer a question by using graphs as well as and/or instead by calculating some values. Sometimes, the spreadsheet is programmed to finish the graph for you and all you have to do is enter the relevant data. The idea here is to help you put together a calculation with a picture of the problem. After all, we do say that a picture paints a thousand words, don't we?

In other cases, you are required to build a graph from scratch. To help you with this you will find that I have included some instructions on how to draw graphs in Excel. However, if you prefer, you can go to Excel's Help screens and type in Graphs or Charts and ask it to tell you all about constructing them. A lot of Excel's Help is very good and useful.

Additional problems

In the case of the Master Budget module, I have not only worked through a full master budgeting case, but I have provided you with a follow up question that you work through. You can simply take the new question and fill in the new data in the "Workings sheet" of the module. If you want, you can print out the question and work on it away from the spreadsheet and computer: that is, as a normal assignment. To help you here, I have included below the blank forms you will need to work through Fransco Ltd.

If you are just going to overtype everything in the Master Budget module "Workings sheet", please work really carefully otherwise you could become confused very easily.

I have put the cash budget, the income statement and the balance sheet all on separate sheets within the module. Whilst this is not necessary, it does separate them all out and does avoid potential formatting problems.

Other help

There is some other help that you should also read that contains further discussions of these modules under the following headings:

• Module formats
• Numerical calculation
• Graphical solution
• One screen at a time
• Printing

In that file, you will find out about the general layout of the files and the numerical versus the graphical solution of problems. You will also learn how and why the modules are presented in a screen by screen format, thus largely avoiding the need for users to scroll all over the place. Finally, you will see that the modules have been designed with printing in mind: all sheets have been fully formatted for the printer.

Finally ...

I hope you find these modules useful and usable. I also hope you will give me some feedback on what you find. If there is something that doesn't work, please let me know through the feedback form.

If there are modules that I haven't published yet and that you'd like to see, let me know, too, and I'll do what I can.

Duncan Williamson
November 2000