Unit 3 : SPREADSHEET APPLICATIONS IN BUSINESS

INTRODUCTION

Spreadsheet is an interactive computer application program for business organization, analysis and
storage of data in tabular form. Spreadsheets have replaced paper-based systems throughout the
business world. Although they were first developed for accounting or book
keeping tasks, they now are used extensively in any context where tabular lists are built, sorted,
and shared. Spreadsheets developed as computerized simulations of paper accounting
worksheets. The program operates on data represented as cells of an array, organized in rows and
columns. Each cell of the array is a model view controller element that may contain either numeric
or text data, or the results of formulas that automatically calculate and display a value based on the
contents of other cells.

Besides performing basic arithmetic and mathematical functions, modern spreadsheet software can
have multiple interacting sheets, and can display data either as text and numerals, original
graphical form. It provides built-in functions for common financial and statistical operations. Such
Calculations are net present value standard deviation can be applied to tabular data with a pre-
programmed function in a formula. Spreadsheet programs also provide conditional expressions,
functions to convert between text and numbers, and functions that operate on strings of text. This
assignment briefly explains the application of spreadsheet in business.

HISTORICAL SIGNIFICANCE OF SPREADSHEET

• Developed in late 1970's by Harvard student Dan Bricklin

Uses of Spreadsheet Application in Business

Many business use spreadsheets on a daily basis. Spreadsheets are designed to store information
but in reality they do a lot more than that. Businesses use spreadsheets to model and manipulate
data sets, to create graphical visualizations and ultimately to inform future decision making and
planning. With popular spreadsheet programs such as Microsoft Excel, plus alternatives from
Open Office and Google Docs, any business can put spreadsheets to good use. Spreadsheets can
prove useful within a business of any size. Some of the important uses of spreadsheets are:
1. Storing Data
The primary purpose of a spreadsheet is to store data in a structured way. Data values are entered
into cells in a worksheet. These data values can be formatted using various categories of data
types, including numerical and textual types. The cells in a worksheet can refer to other cells,
using the location of a cell within the rows and columns in the sheet. Individual parts of a
worksheet can be contained within tables, with a single worksheet potentially holding a range of
information sets. Spreadsheet programs such as Excel provide templates for common business
tasks, such as expenses recording.

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 2. Analyzing Data
Once a spreadsheet has some data values in it, you can perform various analytical tasks on this
data. This includes mathematical functions, such as adding or counting values. By entering a
formula or choosing from one of many preset functions, you can analyze your data sets. This
allows business users to sort data, filter it and process it. For financial data, you can calculate
profits and losses. In a general sense, spreadsheet formulas and functions allow you to carry out
performance measurements for many aspects of your business.

3. Presentation
Spreadsheet applications such as Excel include tools for data visualization. You can take an
existing data set within a spreadsheet and present it within a chart, with various types of graph
and chart options to choose from. The resulting charts let business managers gain insight into the
data by presenting it in graphical ways. These charts can also be used in corporate contexts, such
as within presentations. You can manually control all aspects of a chart display, including chart
type, labeling and colors. You can also print spreadsheet tables and charts for use within reports
and other publications.
4. Future Planning

Spreadsheets facilitate future planning in two ways. First, being able to analyze and visualize
data gives you an insight into how well your business is currently performing, highlighting areas
for growth or reconsideration. Second, you can use a spreadsheet to calculate the potential
effects of changes to your business model. For example, if you use existing information together
with a potential change, such as a sales fluctuation in a retail context, you can determine the
impact of this change. Spreadsheets also use conditional formulas, in which you can carry out
conditional tests on data values, filtering or manipulating the values as a result of these tests.

Example of Spreadsheet in Business Applications

PAYROLL ACCOUNTING

Every employee is paid salary on a pre-determined date within the framework of employee
contract and related personnel policy in force from time to time in an organisation. The
computation of salary payment is based on the number of days an employee has worked, rate per
grade of pay, rate of applied allowances and deductions to be made there from.

The preparation of salary bill should provide for the following:

• Maintaining payroll related data such as Employee No., Name, Attendance, Basic Pay,
applicable Dearness and other Allowances, deductions to be made.
• Periodic payroll computations: the payroll computation includes the calculation of various
earning and deduction heads, which are to be derived from basic values (such as basic salary,
number of days under leave without pay (LWP) and unauthorised absence, etc) as per the
formulae.
• Preparation of salary statement and employees salary slips
• Generation of advice to bank: It contains the net salary to be transferred to individual bank
account of employees and other salary related statutory payments such as provident fund, tax,
etc.

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