Finance and Accounting Students - Do Your Homework in Excel!

In my early days as a student of finance and accounting, I had no idea what I was getting into or how I would take the skills that I learned in the classroom and apply them to the real world. While I eventually learn how to use these skills and develop myself as a professional, I can confidently say that completing the homework assignments through the online learning tools (such as McGraw-Hill and Pearson) alone did not allow me to grasp the concepts I was trying to learn. About two-and-a-half years into my education, a friend showed me that even though we had to do the homework using these online learning portals that force you to type in a number you calculated by yourself, you could still do the work in Microsoft Excel. That advice was a life changing moment for me as a student. I started doing the homework and parts of my studying in Excel because it was very organized, and the program allowed me to see the relationships between the numbers and equations by using relative references instead of hard coding numbers. Almost overnight, I could handle any problem that my instructors threw at me because I was able to practice the process of solving the problems much more efficiently by just changing the inputs in Excel. When I started to practice this, these classes became a lot easier for me because it was very easy to retrace my steps and fix anything I got wrong in the process of learning the material. 

If you're looking to start using Excel to supplement your learning, here are a few tips to keep you organized and maximize the effectiveness of your efforts:

Use the features of Excel!

I've personally seen many people who say they know how to use Excel and they use it on a daily basis the only later realize that they're using it as a piece of paper to hard key every single number in the spreadsheet. Some of the most fundamental features of excel include relative and absolute references two other cells in a spreadsheet, information that dynamically updates as you change cell inputs, and a library of functions to help you as the user hey the information you need from your inputs.

Keep your spreadsheet as automated as possible.

A key feature that many people overlook when using Excel is that cells can dynamically update as inputs are changed. Many homework problems that you receive as an accounting or finance student can be solved in Excel just by typing in the provided information and using equations and formulas to come to the answer. By minimizing and isolating the areas where you need to manually put in information it becomes much easier to backtrack and solve the problem again with different numbers as practice problems.

Show your work in separate cells!            

Showing your work in Excel is easier (and arguably more important) than showing your work on paper. If you are properly using the strategies outlined above with using formulas and automating your spreadsheet to do all your problems, then it becomes even more important to show your work and make your spreadsheet easy to read. Look at this example of two ways to document the work over the same problem in Excel:

The difference between these two images is that the one on the right makes the extra effort to label the information being used and minimize the amount of information being processed in a single cell. If you were to go back and change the information to make a new problem, the version on the right is much better to help understand how the new problem will be solved as opposed to the version on the left, which only shows the answer at a glance. 

While using Excel might not be a viable solution to every single homework assignment you come across in your education, it makes a world of difference when you start using it where it's applicable. So, I encourage you to try this whenever you have a homework assignment that uses numbers and relationships between those numbers to solve the problem. It may take a bit longer at first, but once you get used to organizing and presenting data in Excel using the guidelines above, the process of completing homework assignments and learning from them will become much easier!