Investment bankers seem to love their data tables, and we understand why. Imagine you wanted to look at the impact of a key model input (e.g. weighted average cost of capital) on a key output (e.g. valuation). Then you also wanted to look at another input (e.g. terminal value). Then you wanted to present those results in a table so you could show the output’s sensitivity against those two key outputs e.g. with WACC across the top, terminal value down the side, and valuation in the middle. Without a lot (or, in fact, any) copying and pasting data tables create that table for you.
The great thing about data tables is, once they’re set up, they just sit there working. So even if you re-wire the guts of your model and change how it works, the sensitivity analysis in the data table should keep delivering you results. That’s cool.
In this lesson we check that you’re OK with data tables and we walk you through a simple example. We also look at a special case data table that only modifies one variable. You may not remember back when we mentioned Excel’s scenario manager (a feature of Excel we’re a bit luke warm about) and talked about using scenario manager to output a key result from a model. The single variable data table probably solves that problem more neatly. It’s a special application for data tables.
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