Book Image

Excel 2010 Financials Cookbook

By : Andre Odnoha
Book Image

Excel 2010 Financials Cookbook

By: Andre Odnoha

Overview of this book

<p>Excel is one of the mostused software tools in the world and just about every business has a copy somewhere. Despite its power and flexibility it is not always clear how to use it to perform some of the most important tasks in any business: organizing, analysing, and presenting financial information.<br /><br />Excel 2010 Financials Cookbook contains a rich collection of useful techniques for handling financial data in Excel. From integrating data from a variety of different sources, through organazing and analyzing financial data, to presenting it in a variety of graphical forms, this book has you covered.<br /><br />The book deals first with "normalizing" financial data -- that is, bringing data from a number of different sources into a single format where you can analyze them together. Then you'll learn techniques for managing and analyzing the data before discovering ways to present it graphically. The book then looks at Excel's built in features for financial analysis, and even shows how you can combine the built in features to build your own analysis functions.</p>
Table of Contents (14 chapters)
Excel 2010 Financials Cookbook
Credits
About the Author
About the Reviewers
www.PacktPub.com
Preface
Index

Determining standard deviation for assessing risk


In the recipes mentioned so far, we have shown the importance of monitoring and analyzing frequency to determine the likelihood that an event will occur. Standard deviation will now allow for an analysis of the frequency in a different manner, or more specifically, through variance. With standard deviation, we will be able to determine the basic top and bottom thresholds of data, and plot general movement within that threshold to determine the variance within the data range. This variance will allow the calculation of risk within investments.

As a financial manager, you must determine the risk associated with investing capital in order to gain a return. In this particular instance, you will invest in stock. In order to minimize loss of investment capital, you must determine the risk associated between investing between two different stocks, Stock A, and Stock B.

In this recipe, we will utilize standard deviation to determine which stock, either...