Definition: A spreadsheet, also called an electronic work sheet, is a computer program that organizes data into rows and columns in the form of a graph. Each row and column can be manipulated with formulas, commands, and formats. This tool is especially useful for accountants, financial analysts, and business people to analyze business performance numbers and results.
What Does Spreadsheet Mean?
The most common spreadsheet program that accountants use is Microsoft Excel. This product was initially developed in the 1990s in the Office Suite program package and has since become the industry standard.
Example
Spreadsheets allow accountants to do much more than organize data. They can manipulate it in order to test the impact that alternative strategies and performance results would have on the company’s bottom line. They can also use the software to make projections about future performance, development, and even market trends.
Without the help of accounting packages, spreadsheets are often used to prepare financial statements, budgets, and stock analysis reports. Since this tool is so versatile and easy to use, it can also increase the analysis time, review capabilities, and understandability of reports.
For example, master formulas and cells can be set up to auto calculate values. This way a budget can be made using a 10 percent increase from last year’s numbers. Once the budget is analyzed, the master cell that controls the page formulas can simply be changed to reflect a 12 percent increase in performance. Then the entire budget automatically recalculates based on the new percentages.
Basically, spreadsheet programs like Excel can do any type of data organization and manipulation. Databases and other input devices can collect data and feed it into a spreadsheet, so management can easy turn it into useful information and analyze the company results for the period. Pretty cool, huh. You might be thinking that this tool is just for nerds. Well, it kind of is. : )
