Advanced Excel Formulas

Ten of the most important Excel formulas to know.

Every financial analyst spends more time in Excel than they may care to admit.  Based on years and years of experience, we have compiled the most important and advanced Excel formulas that every world-class financial analyst must know.

Formula: =INDEX(C3:E9,MATCH(B13,C3:C9,0),MATCH(B14,C3:E3,0))

This is an advanced alternative to the VLOOKUP or HLOOKUP formulas (which have several drawbacks and limitations).  INDEX MATCH[1] is a powerful combination of Excel formulas that will take your financial analysis and financial modeling to the next level.

INDEX[2] returns the value of a cell in a table based on the column and row number.

MATCH[3] returns the position of a cell in a row or column.

Here is an example of the INDEX and MATCH formulas combined together.  In this example, we look up and return a person’s height based on their name.  Since name and height are both variables in the formula, we can change both of them!

For a step-by-step explanation or how to use this formula, please see our free guide on how to use INDEX MATCH in Excel.

Formula: =IF(AND(C2>=C4,C2=21″)

These two advanced formulas are great uses of conditional functions.  SUMIF adds all cells that meet certain criteria, and COUNTIF counts all cells that meet certain criteria. For example, imagine you want to count all cells that are greater than or equal to 21 (the legal drinking age in the U.S.) to find out how many bottles of champagne you need for a client event.  You can use COUNTIF as an advanced solution, as shown in the screenshot below.

In our advanced Excel course, we break these formulas down in even more detail.

Formula: =PMT(interest rate, # of periods, present value)

If you work in commercial banking, real estate, FP&A or any financial analyst position that deals with debt schedules, you’ll want to understand these two detailed formulas.

The PMT formula gives you the value of equal payments over the life of a loan.  You can use it in conjunction with IPMT (which tells you the interest payments for the same type of loan), then separate principal and interest payments.

Here is an example of how to use the PMT function to get the monthly mortgage payment for a $1 million mortgage at 5% for 30 years.

Formulas: =LEN(text) and =TRIM(text)

The above formulas are a little less common, but certainly very sophisticated ones.  They are great for financial analysts who need to organize and manipulate large amounts of data.  Unfortunately, the data we get is not always perfectly organized and sometimes, there can be issues like extra spaces at the beginning or end of cells.

The LEN formula returns a given text string as the number of characters, which is useful when you want to count how many characters there are in some text.

In the example below, you can see how the TRIM formula cleans up the Excel data.

Formula: =A1&” more text”

Concatenate is not really a function on its own – it’s just an innovative way of joining information from different cells and making worksheets more dynamic.  This is a very powerful tool for financial analysts performing financial modeling (see our free financial modeling guide to learn more).

In the example below, you can see how the text “New York” plus “, “ is joined with “NY” to create “New York, NY”. This allows you to create dynamic headers and labels in worksheets. Now, instead of updating cell B8 directly, you can update cells B2 and D2 independently.  With a large data set, this is a valuable skill to have at your disposal.

These advanced Excel functions can be combined to create some very advanced and complex formulas to use.  The CELL function can return a variety of information about the contents of a cell (such as its name, location, row, column, and more).  The LEFT function can return text from the beginning of a cell (left to right), MID returns text from any start point of the cell (left to right), and RIGHT returns text from the end of the cell (right to left).

Below is an illustration of the three formulas in action.

To see how they can be combined in a powerful way with the CELL function, we break it down for you step by step in our advanced Excel formulas class.

We hope these top 10 advanced Excel formulas have been helpful for you. They should go a long way to improving your financial analysis and financial modeling skills.

Below are more CFI resources to help you become an Excel power user: