This post is written by Paramdeep.
Today, let us learn how to use NPV() function in Excel & create a simple financial model.
NPV – Introduction:
If you are dealing with cash and valuations, you are bound to have come across the NPV function. If you don’t know the assumptions behind the same, I bet it could cost you your job!
Let’s take a simple project – You buy a MSFT stock for USD 100. You receive a dividend of USD 10 in the first year, USD 20 in the second year, USD 40 in the third year and then you sell it out for USD 140. If you could have alternatively put this money in bank at 10% interest rate, have you gained anything?
How do you model this in excel? In this tutorial we understand how you can use NPV to do this analysis and what kind of pitfalls you can land into!!
What is the NPV() function
Simply speaking, NPV function calculates present value of your cash flows. Let’s take a simple example first –
You invest $100 in a bank, which pays 10% interest
- What is its value 1 year down the line?
- I am sure, you don’t need any coffee to get that value – 100 x 10% is the interest and 100 is the principal that you had. So the value 100 x (1+10%) = 110
- What about 2 years?
- Simple 100 x (1 + 10%)^2 = 121
- So, if I were to ask you, the present value of a cash flow of 121, that you were to get 2 years down the line at 10% interest?
- Again simple, you told me initially, it was $100
NPV does exactly that – gets you the present value of your cash flows
The function is simple, it does all the difficult calculations for you and gets you the solution!
Beware – The function has its own assumptions!
Though the function is quite convenient, but it has its own pitfalls. And in my modelling experience I have seen a lot of people making that mistake! Lets model the situation described in the beginning (The MSFT Case). The cash flows are given to you as:
Let us see, internally what we get by modelling the NPV from the first principles and using the NPV function
You can clearly see that there are two ways of using NPV function (and each has its own assumption!)
So what is happening internally?
Usually when we start a project, we assume that the investment is made upfront (On day 0). Then the revenues, costs and the cash would start flowing in. Since the investment is made on day 0, it should not be discounted.
But when you use the NPV function, excel internally makes an assumption that even the first cash flow is at the end of the year (Per se, this is not wrong, but in normal circumstances, you make the payment upfront!).
So the right usage of the function would be to add the first cash without discounting and then use the NPV function to discount the rest of the cash flows.
If you just use the NPV function on all the cash flows, then the inherent assumption is that even the first cash flow is at the end of the year.
Few other ways of calculating NPV
When you are dealing with cash flows and valuations (typically that is when you come across the functions like NPV, etc) even small mistakes cost dear. You want to make sure that you are as accurate as you can ever be. At that point of time, if the cash is not flowing at the year ends, you can use a more powerful function in excel – XNPV. You can show it the cash and the exact dates and it would calculate the exact NPV for you. People don’t often use it as they don’t know the exact dates of cash flow!
How do you calculate the discounted cash values in your models?
I know the easiest way would be to use the NPV function. It is easy to use but at the same time could be tricky. So how do you implement such functionality in your models?
Templates to download
I have created a template for you, where the subheadings are given and you have use the functions to get the right values for you! You can download the same from here. You can go through the case and fill in the yellow boxes. I also recommend that you try to create this structure on your own (so that you get a hang of what information is to be recorded).
Also you can download this filled template and check, if the information you recorded, matches mine or not!
For any queries regarding the cash impact or financial modeling, feel free to put the comments in the blog or write an email to paramdeep@edupristine.com
Join our Financial Modeling Classes
We are glad to inform that our new financial modeling & project finance modeling online class is ready for your consideration.
Please click here to learn more about the program & sign-up.
Learn more about Financial Modeling:
Go thru these articles to learn more about Excel Financial Modeling:
- Excel Financial Modeling – 6 part tutorial
- Introduction to Project Finance
- Using MOD() function to implement frequency escalation in Excel
- Creating a P&L Reporting Model in Excel – 6 part tutorial
The article is written by Paramdeep from Pristine.
Chandoo.org has partnered with Pristine to launch a Financial Modeling Course. For details click here.
38 Responses to “Time to showoff your VBA skills – Help me fix ActiveSheet.Pictures.Insert snafu”
I tried your code with 2003, it works.
But, I know Addpicture does not take URLs anymore with 2007 onwards, perhaps its the same with picture.insert as well.
http://support.microsoft.com/kb/928983/en-us
The above link gives the solution as "picture fill in a shape such as a rectangle".
Tried to recreate this, but it worked fine for me. I just took the image of the error you showed in the post. Is there more info that can narrow this down a bit?
Don't know if this helps?
http://www.theserverside.com/discussions/thread.tss?thread_id=47101
Hi
Not sure if this is what you're after, but I just tried this
Sub Macro1()
ActiveSheet.Pictures.Insert("http://www.google.co.uk/intl/en_uk/images/logo.gif").Select
End Sub
Tied a button to it on the sheet and it seems to work; hope this helps a little
Ian
@All.. the issue is in Excel 2007. In 2003 ActiveSheet.Pictures.Insert seems to work fine. Unfortunately, I have design this in Excel 2007.. that is why I posted it here..
v2
Sub Macro1()
Set n = ActiveSheet.Pictures.Insert("http://www.google.co.uk/intl/en_uk/images/logo.gif")
With Range("c12")
t = .Top
l = .Left
End With
With n
.Top = t
.Left = l
End With
End Sub
Ian
That didn't come out very well. This positions at c12, so can change easily:
Sub Macro1()
Set n = ActiveSheet.Pictures.Insert("http://www.google.co.uk/intl/en_uk/images/logo.gif")
With Range("c12")
t = .Top
l = .Left
End With
With n
.Top = t
.Left = l
End With
End Sub
Works OK in 2007
Ian
The above codes work fines to my EXCEL 2007. Thanks.
Chandoo:
Try 'ActiveSheet.Pictures.Insert'
With ActiveSheet.Pictures.Insert("C:\Example.png")
.Left = ActiveSheet.Range("A1").Left
.Top = ActiveSheet.Range("A1").Top
End With
activesheet.pictures.insert "C:\Documents and Settings\Jon Peltier\Desktop\2007 stuff\insert_charts_2007.png"
Works for me in 2003 SP3 and in 2007 SP2.
Check the URL, and make sure you have internet connectivity.
What also works, and is newer (pictures.insert was supposedly deprecated in '97):
activesheet.shapes.addpicture "C:\Documents and Settings\Jon Peltier\Desktop\2007 stuff\insert_charts_2007.png", false, true, 200,200,100,100
Unfortunately you must specify dimensions (the last four arguments) and you don't necessarily know them. But the picture size is still related back to the original picture size, so you could use scaleheight and scalewidth to fix this.
Chandoo: I just re-read your post.
The code I posted works for me. However, I'm using a local picture. If you try to add a picture from the web, this won't work.
I remember solving this problem before by adding a rectangle shape first, then using the Shapes.AddPicture method to get a picture from the web.
I'll find that code and post it here.
Some more updates... The code "ActiveSheet.Pictures.Insert (path)" works fine in Excel 2007 at home. Strange it failed miserably on my work laptop. Do you think this has got something to do with SP2 of MS Office 2007 or something like that?
@Ian, Jon: Thanks for the code snippets. I guess I will use my home installation of excel to do this.
Chandoo:
Try this on your work laptop:
Sub test()
ActiveSheet.Shapes.AddShape msoShapeRectangle, 50, 50, 100, 200
ActiveSheet.Shapes(1).Fill.UserPicture _
"http://www.datapigtechnologies.com/images/dpwithPig6.png"
End Sub
FYI:
http://support.microsoft.com/kb/928983/en-us
I didn't mean to post code with a local file, because both approaches worked with an internet image as well. This is in Excel 2007 SP2.
activesheet.pictures.insert "http://peltiertech.com/images/2009-07/col_area_noblanks.png"
Jon: Looks like I have SP1 on my client machine! I wasn't paying attention.
Just checked my home computer where I have SP2, and you're right...looks like they fixed it.
I didn't even bother testing in SP1, though I could if anyone cares enough.
I'm afraid I don't have a solution, but I find it remarkable that after attaining a certain status in the Excel world, Chandoo does not need to post on an Excel discussion forum to get help for an Excel problem. Instead, he posts on his blog and all the gurus come rushing to his help.
Isn't Web 2.0 great?
Teylyn - I saw Chandoo's tweet first, and followed the link back to his blog.
@Mike.. thank you. I have seen the fill rectangle solution before posting the query here. For that matter, I have also tried the solution of embedding a browser control on a spreadsheet. both of these seemed a bit extreme. That is why I have asked it here.
But I guess I will end up using it if I had to build this in work laptop.
@Teylyn: I have thought of posting this in a forum. (Unfortunately I have not been to any excel group in the last 5 years. Last time I was active was when I built a jave based excel sheet construction solution using POI.HSSF classes of Apache... ) After searching for a few hours, I found several forum posts where others had same problem and the solution recommended (using .left and .top parameters) is not working for me. Incidentally most of these solutions are from a certain Jon Peltier 😛
I thought may be the problem is interesting for fellow blog readers. So I posted it here.
Hi,
Adapting the code in the question,
[code]
Sub InsPicture()
pPath = "http://chandoo.org/images/pointy-haired-dilbert-excel-charts-tips.png"
With ActiveSheet.Pictures.Insert(pPath)
.Left = Range("a1").Left
.Top = Range("a1").Top
End With
End Sub
[/code]
Seems to work fine
Looks like it was a problem in 2007 up to SP1, which was corrected in SP2.
@Jon.. seems like the case. I just checked the version at work laptop. it is 12.0.6331.5000 (SP1).
Thank you so much every one. I really appreciate your time and suggestions in solving this.
Glad to help. I couldn't understand why something so straightforward wasn't working.
Hi All
Is there a way of inserting a motion clip eg animated gif or swf or flv?
Thks
You can insert animated GIFs by inserting them in a browser control through VBA. For other types of movies, I can guess you can insert them as clip art.
I WANT THE INSERT PICTURE BY USING COADING
so currently i was struggling same as you, chandoo, with the insert picture method in excel 2007/10 from an url and came along your thread here.
so i re-designed the code on the addshape method as mike was suggesting it and all of the sudden it works just fine.
thanks alot to you guys, you were a great help
a big salut from switzerland
Hi guys,
I need help copying and pasting an image with the path in a cell.
I leave the code.
And thank you very much!
Sub Copiarimg()
Dim pic As Picture
With ActiveSheet
Set pic = .Pictures.Insert(Range("f2").Value)
With .Range("e9:g22")
pic.Top = .Top
pic.Left = .Left
pic.Width = .Width
pic.Height = .Height
End With
End Sub
I've played around with the approaches in these comments, and the code below is what I've come up with. The ImagePath can be a local file or a URL. As Jon mentioned above, the trick is to set an arbitrary value for the width and height, then call the ScaleWidth and ScaleHeight methods afterward to reset the picture to its original size. Once the LockAspectRatio property is set, you can change the picture width and the height will automatically scale (or vice-versa).
Sub AddPictureToRange(TopLeftCellAddress As String, ImagePath As String)
Dim pic As Shape
Dim l As Single, t As Single
Dim temp As Single
l = Me.Range(TopLeftCellAddress).Left
t = Me.Range(TopLeftCellAddress).Top
temp = 10# ' arbitrary value
Set pic = Me.Shapes.AddPicture(ImagePath, msoFalse, msoTrue, l, t, temp, temp)
pic.ScaleHeight 1#, msoTrue
pic.ScaleWidth 1#, msoTrue
pic.LockAspectRatio = msoTrue
End Sub
I need some help with inserting pictures. I have an excel file with a column of item numbers next to this row I want to insert a picture of this item. The pictures are coded with the item number so I tried to insert it with one of the codes above:
Sub InsPicture()
pPath = "http://img.bricklink.com/P/80/55236.gif"
With ActiveSheet.Pictures.Insert(pPath)
End With
End Sub
That worked but I need to do that for every row separtly.
So I tried in the code
pPath = "http://img.bricklink.com/P/80/"&Text(a1;"#")&".gif"
But that gives errors.
Anybody ideas?
Hi Nicholas, I used your solution in a related problem in Excel 2003 and it worked flawlessly..thank you!
Hi Mike Alexander,
Your solution with some changes was helpful in my problem in XL 2007, thanks.
Hi,
thanks all. In addition, I had a problem with multiple pictures inserting (every new picture replaced the prior one). I've changed it a bit, may be helpful..
Sub test()
ActiveSheet.Shapes.AddShape msoShapeRectangle, 50 , 50, 100, 200
ActiveSheet.Shapes(1).Fill.UserPicture _
"http://www.datapigtechnologies.com/images/dpwithPig6.png"
ActiveSheet.Shapes(1).Copy
ActiveSheet.Paste
End Sub
Try this instead:
Sub test()
ActiveSheet.Shapes.AddShape msoShapeRectangle, 50 , 50, 100, 200
ActiveSheet.Shapes(ActiveSheet.Shapes.Count).Fill.UserPicture _
"http://www.datapigtechnologies.com/images/dpwithPig6.png"
End Sub
Thanks to everyone, this thread has been very helpful. However, image inserting still doesn't work quite as expect for me.
While I can get a picture inserted into an Excel 2010 worksheet using either:
1) ActiveSheet.Shapes(ActiveSheet.Shapes.Count).Fill.UserPicture...
2) ActiveSheet.Pictures.Insert(pPath), and
3) Shapes.AddPicture...
unfortunately the images all insert with a display size determined not by the actual pixel dimensions of the image but by the dpi resolution.
So for example, if I insert two copies of the exact same 600x600 pixel image, one with a 300dpi resolution and the other with 72dpi, they display at vastly different sizes on screen.
While this might be intended behaviour for Excel in order to maintain a WSYWIG printing layout, I actually need a way to insert the image based on the the actual pixel dimesnsions and ignoring the dpi resolution.
Any help appreciated.
Thanks
Kez
Not doing an intentional bump, but realised I posted in rely to one of the repsonses here instead of to the main thread, so reposting.
=====
Thanks to everyone, this thread has been very helpful. However, image inserting still doesn’t work quite as expected for me.
While I can get a picture inserted into an Excel 2010 worksheet using any of the below methods:
1) ActiveSheet.Shapes(ActiveSheet.Shapes.Count).Fill.UserPicture....
2) ActiveSheet.Pictures.Insert(pPath), and
3) Shapes.AddPicture....
unfortunately the images all insert with a display size determined not by the actual pixel dimensions of the image but by the dpi resolution.
So for example, if I insert two copies of the exact same 600×600 pixel image, one with a 300dpi resolution and the other with 72dpi, they display at vastly different sizes in Excel on screen.
While this might be intended behaviour for Excel in order to maintain a WYSIWYG printing layout, I actually need a way to insert the images based on the the actual pixel dimesnsions and ignoring the dpi resolution.
Any help appreciated.
Thanks
Kez
Well, answered my own question 🙂
For those who might be interested, you can use this function:
Public Function GetPicDims(strFilePath As String, strFileName As String) As String
GetPicDims = CreateObject("Shell.Application").Namespace((strFilePath)). _
ParseName(strFileName).ExtendedProperty("Dimensions")
End Function
to get the dimensions of the image you want to insert. Then you can parse the return string and use the width and height values to add a rectangle shape of the appropraite size, like:
ActiveSheet.Shapes.AddShape msoShapeRectangle 50, 50, iWidth, iHeight
which you then fill with the picture:
ActiveSheet.Shapes(ActiveSheet.Shapes.Count).Fill.UserPicture "c:\temp\test.jpg"
This way the picture gets inserted using the pixel dimensions and the (print) resolution gets ignored.
If desired, the GetPicDims function can be made more generic to get other ExtendedProperties.
Regards
Kez