formula calculation

[Excel GuRu]

Is there a way to setup multiple formulas so they calculate in a specific
order?

I have a complicated financial model that we use for budgetting. After we
change assumptions, we get errors in our formulas. What we have to do, is
trace the cells back to the error (using the auditing tools) and delete the
formula calculating the error and then undo the deletion. Only trouble is,
you have to do that many times to get everything calculating properly.

Problem is created by the following: we are trying to calculate net income
after tax. We need to calulate interest income(expense) based on the monthly
cash position which in some cases is calculated on the cash position after
the tax payment. Only trouble is, tax is calculated on net income before
tax, which is after interest income. Understand the dilemma? I'm hoping
somebody has a solution they could suggest.

 

[Charles Williams]

I see two possible solutions:

- use iteration (I do NOT recommend this, Excel Iterative calculations
should only be handled using a very long pole)

- 'unwind' the circular calculation by calculating interest on cash position
before tax, then calculating tax and cash position after tax etc.


regards
Charles
______________________
Decision Models
FastExcel 2.2 Beta now available
www.DecisionModels.com

 

[Excel GuRu]

I am using iteration. The model doesn't work otherwise(lots of circular
references)

What is the problem with Iteration? Is there a source where I can read more
about it? I've found "Iteration" useful, although I don't know the drawbacks.

Also, I am trying a different form of calculation for the final month of the
year in which we assume we will pay the majority of the tax. I'm calculating
tax based on net income before interest for that month.

 

[Pete_UK]

I have used User Defined Functions in the past in order to control the
order of a calculation and use iterative methods (eg constantly
reducing some value and adding it to some other variables as you go
round a loop, until the value gets to zero). I could never get the hang
of Excel's iteration.

Hope this helps.

Pete

 

[Charles Williams]

The main problems with iteration are:

- one intended circular reference masks all other unintended circular
references, so it is difficult to debug/validate the model unless you take
precautions.
- its slow

see
http://www.decisionmodels.com/calcsecretsk.htm


Charles
______________________
Decision Models
FastExcel 2.2 Beta now available
www.DecisionModels.com