Line charts are essential for trend analysis, comparison over time, spotting distribution or volatility in your data. In this page, let me introduce 6 powerful line chart variations to help you with business data analysis. These are,
- Indexed Line Chart
- Sparklines
- Spaghetti Line Chart
- Smoothed Line Chart
- Forecast Line Chart
- Line Chart Combinations
Line Chart Variations - Video
In the below video, I explain 6 line chart variations with instructions on how to create and work with them. Watch it or read on for the chart details.
Indexed Line Chart
Indexed charts are great for comparing apples with oranges. For example, you can compare sales of two products over a period of time with Indexed Chart, even if the sales numbers are in different ballparks (one sells in millions, other in thousands).
Here is a demo of indexed line chart.
Sparklines
Sparklines are tiny charts that you can fit in a cell. They pack a lot of information and help in visualizing more items.
Here is a sparkline demo:
Spaghetti Line Chart
Often we have too many lines and that can be distracting. Use a spaghetti line chart to drive focus to one of the lines. You can make them interactive so users can pick the noodle they want to taste.
Here is a demo of interactive spaghetti chart.
Smoothed Line Chart
Sometimes our data is too volatile. In such cases, you can smooth it to spot the trend and meaningful changes.
There are various ways to smooth line charts. You can use “Smooth line” option of the chart or apply moving average based smoothing.
Here is a demo of both techniques.
Learn more:
Forecast Line Chart
Use Excel’s FORECAST.ETS() and other suite of functions to create forecasts from your data and visualize them. You can analyze trend and seasonality of the data with these functions. Forecast charts are helpful in business reporting.
Here is a demo of a forecast line chart.
Learn more:
Line Chart Combinations
No matter how hard you try, sometime a line alone won’t do. In those cases, you can easily combine line charts with other visualizations in Excel. Combination Charts are very easy to create.
Here is a demo of line chart with column combination.
How to create combination charts?
- In new versions of Excel (365, 2016+), just go to Insert ribbon and click on Combo chart button (the one that looks like a line column combination).
- In earlier versions of Excel, just make a line chart, right click on the line that you want to change to something else and select “Change series chart type” option.
Don't forget the labels ...
You can make regular or any of the variations listed above better by adding sensible labels and chart titles that tell a story.
Here is a demo of special labels on line charts.
Download Line Chart Variations Workbook
Click here to download the Excel file with all these variations. Play with the data or charts to learn more about these 6 line charts.
If you have any questions or suggestions, post them in the comments section.
15 Responses to “Modeling Interest During Construction (IDC) – Excel Project Finance”
Thanks again for a very helpful post.
I had a similar problem when trying to model a balance sheet and profit and loss projection. The problem was that interest expense (in P&L) was dependent on a cash shortfall (in BS) which had to be funded. The cash shortfall depended on how much interest was paid, so the mutual dependency made a circular reference.
I addressed it with a macro that calculated interest outside of the P&L, then pasted the calculated amount into the P&L as a value. The model was out of balance, but by repeating the pasting and calculating loop the imbalance reduced to zero. It was a bit messy, and had to be repeated every time a line changed - but it worked.
If I have to do it again I'll read this article again first and see if it can be done more elegantly.
Hi,
The use of a circular reference can be avoided in this case. Just make use of the geometric sum to calculate the interest required. I’ll walk through the example from the spreadsheet.
First calculate the cash needed each year without the interest expense. So you year 1 you need 55 Mn, year 2 105 Mn, and 190 Mn for year 3. The total amount to borrow for year 1 is then (50 Mn)/(1-interest_rate) = (50)/(1-0.1). For years 2 and subsequent the amount borrowed is the cash needed in that year plus the interest_rate times the amount already borrowed. For year 2 (105 + interest_rate * sum(previous debt raised))/(1-interest_rate)=(105+0.1*61.1)/(1-0.1).
This process avoids the need for a circular reference, and makes the calculation more stable.
Thanks,
Tristan
The question is for the year 1 in your case, the amount works out to 45 mn. However in the year 2 you have applied the loan amount as 61.1 mn.
Am I missing something ! Please help !
very helpful information!!!
using circular references and to make model more stable we can use combination of "IF" and "ISERROR" functions. i.e
=if(iserror(formula1),"",(formula1))
this formula will return blank value if there is any error otherwise give the result required.
I usually use this in my models and it makes them very stable......
🙂 🙂 🙂
@Terry: Thats right. Exactly same problem is seen in Interest - Cash cycle in P&L and Cash Flow statement as well. In our trainings on financial modeling in excel, we demonstrate using both the circular loops as well as the macros to take care of this problem. Circular loops have their own pitfalls. If the model enters into a state of error, the error percolates!
@Tristan: Thanks for pointing out. I agree with you that if circular loops can be avoided, they should be avoided.
@Yogesh: This is one way of avoiding the problem. Although circular loops have another problem that they make your sheet slower. Each time, there is a change in the sheet, all the calculations are redone. So if they can be avoided, they should be avoided.
Please note that this was an example (a large one indeed) and I didn't have space to speak about the pitfalls of this approach! I just wanted to illustrate an approach and am glad that some of you found it useful!
I think while posting, there is an error in the images! The last image should be flipped with the one that is posted in step VII!
I think you can try the following simple solution given by Microsoft itself to make the circular works:
Windows: Excel Options -> Formulas -> Put a tick on "Enable iterative calculation"
Mac: Excel -> Preference -> Calculation ->Put a tick on "Limit iteration"
You can change the maximum number of calculation iterations as well as the maximum changes which iteration stops for goal seeking or for resolving circular references based on the number you type in the maximum change box.
Thank you.
Hey All
I heard that we can take care of the circularity with the help of macro for IDC. Can anybody help on the steps to construct the macro for the same.
Regards
Vinay
Hi Vinay,
If you look closely, you are essentially copying the values from the interest calculation to the IDC in project cost.
Basically you can record a macro, that takes the values from interest and pastes special the values in IDC row in project cost.
Then you can run that recorded code in a for loop.
Hope this helps.
Thanks Param for reply.
But before calculating interest, i need to provide for Upfront Equity and Equity, which are essentially part of total project cost. Hence, i need to put in Upfront Equity and Equity to calculate the IDC which is again hitting the total project cost.
Bit of confused on how to remove this circular reference.
Regards
Vinay
Wow, this was a brilliantly simple post. I was looking online for a while before I found this page. Never seen this been explained so beautifully yet so crisply before. Thanks for saving my ass at work! (i'm relatively new to finance + modeling)
I'm not sure why but this web site is loading very slow for
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[…] Project Finance Modeling using Excel – Part 1 & Part 2 […]
I have been reading your blog since my college days. Today, I'm writing just to say thanks.
We have calculated Financial Rate of return of a hydropower projects, and the observer has raised an observation regarding Total Project cost with IDC Rs. 8616.01 million (PKR) and with-out IDC 8352.46 million (PKR). How does the Financial nalysis be calculated on the basis of with-out IDC Or With IDC?????
Please helpf. if possible to spare some time.