Iserror formula

Sometimes on our financial modelling course training we get questions on the Iserror and Iferror functions.

We’ve seen modellers use Iserror to condsolidate up/ spot the usual (e.g. #REF, #DIV/0!) errors as soon as they appear across a model. Iserror (along with Excel’s watch window) can help improve the speed with which you spot that your most recent move destroyed your model.

A great application for Iferror is in regularly calculating a series of price/ earnings (“P/E”) ratios as part of valuation work. If your objective is to find a sector-average ratio, you don’t want a #DIV/0! error suddenly appearing if one company reports no earnings. That’s an ideal application for Iferror.

Excel's iserror formula

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