This article dives deep into the functionalities of the Microsoft Excel spreadsheet, explaining its role as a powerful tool for cost estimation in projects. It focuses on the application of Excel's formulas and their capability to automate calculations, as well as the benefits of using Excel as a calculator.
Key Insights
- Microsoft Excel's spreadsheet serves as the backbone of a project estimate, facilitating an amalgamation of quantities and unit costs to derive the overall cost of a project, complete with an audit trail.
- Excel's core strength lies in its formulas which are created inside the cells, enabling calculations to any extent required. These formulas can reference multiple cells and the changes made to any single cell can ripple through the entire spreadsheet, automatically updating the results.
- Excel's formulas offer longevity and can be used as a template indefinitely, thereby eliminating the need to recreate them. This feature, along with the facility to lock formulas to prevent changes, is crucial in maintaining the integrity and accuracy of calculations.
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Let's talk about spreadsheets in Microsoft Excel. The spreadsheet is the backbone of the estimate. This is where all your quantities and all your unit costs come together to create an overall cost of the entire project with a complete audit trail of how you got there.
Instead of using a calculator, you're actually defining everything inside this spreadsheet and identifying how it's calculated, how you arrive at the cost that you come up with in your estimate. Excel uses formulas. Formulas are created inside each of the cells inside of Excel that allow you to do calculations to any degree required.
So think about it like this, that formulas can reference another cell or many cells, or it could be a complete formula within a single cell to give you the desired value that you're looking for. So cells work together to provide the outcome in another cell. We do not have to put complete formulas in a single cell.
We can put values in different cells, and those cells can be referenced in a formula. We can update each cell independently without having to navigate through a long formula. So think of it this way, Excel is your calculator.
You don't need to use a calculator on your computer. You don't need to use a calculator on your phone. Just think of Excel as your calculator.
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When we used to use a column or pad, and we made a mistake and we had to change a number, we had to recalculate the entire sheet by hand. Wonderful thing about an Excel spreadsheet, or any spreadsheet for that matter, is that each time you make a change, that change is rippled through the entire spreadsheet that actually gives you a revised total number at the very bottom. The cells will update automatically because the results in a spreadsheet are all built upon the sum total of multiple other cells referencing each other.
This is why you always make sure that you have calculations in the cells and you leave them in there, so that if you change one value, all the other changes take place behind it. There's a lot of tips and tricks you could use in Excel, but a very important one to know is how to copy and paste formulas so that they can be reused. Once you create a formula inside of a spreadsheet that may be used as a template, you can then lock it to where the formula cannot be changed again, as long as the values of other cells are entered properly, the formulas will always calculate the way they're supposed to.
The beauty of having formulas in an Excel spreadsheet is that once the formula is created, it can last indefinitely as a template, so that you don't have to recreate the formula each time. Excel is the backbone for many applications that are being used on a regular basis, whether you realize it or not. It may not look like Excel, it may not look like a spreadsheet, but the way they're set up is they use Excel or the spreadsheet as the backbone to run these applications.
