{"id":1237,"date":"2021-02-26T16:11:08","date_gmt":"2021-02-26T08:11:08","guid":{"rendered":"https:\/\/www.yohz.com\/blogs\/?p=1237"},"modified":"2021-02-26T16:11:08","modified_gmt":"2021-02-26T08:11:08","slug":"why-do-you-need-to-define-a-period-for-the-irr-mirr-and-npv-financial-functions-in-easy-excel-analysis-and-sql-data-analysis","status":"publish","type":"post","link":"https:\/\/www.yohz.com\/blogs\/2021\/02\/26\/why-do-you-need-to-define-a-period-for-the-irr-mirr-and-npv-financial-functions-in-easy-excel-analysis-and-sql-data-analysis\/","title":{"rendered":"Why do you need to define a period for the IRR, MIRR and NPV financial functions in Easy Excel Analysis and SQL Data Analysis"},"content":{"rendered":"

Easy Excel Analysis<\/a> and SQL Data Analysis<\/a> added support for financial functions in version 2.\u00a0 One quirk you may have noticed is that for the IRR, MIRR, and NPV functions, you need to enter the column containing a period.\u00a0 Excel doesn’t require this, so why is it required here?<\/p>\n

\"\"<\/p>\n

Let’s take a step back and use a simple example in Excel to explain this requirement.\u00a0 Say we have a single investment we want to calculate the NPV for.\u00a0 We would list the net cash flow in chronological order and calculate the NPV accordingly.<\/p>\n

\"\"<\/p>\n

The point to note is that the order of the net cash flow needs to be sorted by period to be accurate.\u00a0 If the values were not sorted, we would not get the correct value e.g.<\/p>\n

\"\"<\/p>\n

Now say we have to deal with multiple ‘groups’ of investments.<\/p>\n

\"\"<\/p>\n

In the example above, we are calculating the NPV for each investment.\u00a0 In Easy Excel Analysis<\/a> \/\u00a0SQL Data Analysis<\/a>, we get the same values when we group our data by the Investment<\/strong> column.<\/p>\n

\"\"<\/p>\n

Now say we want to compute the NPV of each category of investment.\u00a0 In Excel, we can’t just sort by the Category<\/strong> column to compute the NPV.<\/p>\n

\"\"<\/p>\n

neither can we just sort by both the Category<\/strong> and Period<\/strong> columns this way:<\/p>\n

\"\"<\/p>\n

The correct way is to sum the Net cash flow<\/strong> values for each period by category i.e.<\/p>\n

\"\"<\/p>\n

To perform the same computation In Easy Excel Analysis<\/a> and SQL Data Analysis<\/a>, we just drag the Category<\/strong> column to the grouping area like this:<\/p>\n

\"\"<\/p>\n

That is the reason why Easy Excel Analysis<\/a> and SQL Data Analysis<\/a> requires a period<\/strong> value when calculating NPV, IRR and XIRR.\u00a0 It uses the values in that column to determine how to group the cash flow values when grouping rows together.<\/p>\n

To see the NPV value by individual investments,\u00a0 we just drag the Investment<\/strong> column to the grouping area.\u00a0 Now we can easily see the NPV per category and per investment.<\/p>\n

\"\"<\/p>\n

Thus it’s just a matter of dragging and dropping which columns you want to group by, and Easy Excel Analysis<\/a> \/\u00a0SQL Data Analysis<\/a>\u00a0will calculate the NPV for you at each grouping level<\/span>.\u00a0 It could not be easier.<\/p>\n

Download a 14-day trial of Easy Excel Analysis<\/a> or SQL Data Analysis<\/a>, and start analyzing data in ways you never could in Excel, or would never do because it was too time consuming.<\/p>\n

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Easy Excel Analysis and SQL Data Analysis added support for financial functions in version 2.\u00a0 One quirk you may have noticed is that for the IRR, MIRR, and NPV functions, you need to enter the column containing a period.\u00a0 Excel doesn’t require this, so why is it required here? Let’s take a step back and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[82,86],"tags":[83,87],"_links":{"self":[{"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/posts\/1237"}],"collection":[{"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/comments?post=1237"}],"version-history":[{"count":2,"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/posts\/1237\/revisions"}],"predecessor-version":[{"id":1307,"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/posts\/1237\/revisions\/1307"}],"wp:attachment":[{"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/media?parent=1237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/categories?post=1237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.yohz.com\/blogs\/wp-json\/wp\/v2\/tags?post=1237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}