3D referencing allows you to apply the same formula across a number of tabs. In financial modelling 3D referencing can be useful if you have a large model, with a large number of identical tabs. Perhaps each tab represents an operating subsidiary, and you’d like to be able to add up all the revenues across all subsidiaries. 3D referencing helps you do this.
Financial modelling course tips: 3D referencing
Of course, instead of using 3D referencing, you could just create a formula that adds e.g. revenue from tab1 + revenue from tab2 + revenue from tab 3 etc. But what if you add/ remove a tab or operating subsidiary to/from the mix? Where you have created formulas that draw on multiple tabs, all of those formulas need to be changed. With 3D referencing the formula automatically adjusts if you add/ remove a new tab or operating company.
Download the Excel spreadsheet: 3D referencing to see the exmaple working. Try removing one of the existing Opco tabs or inserting a new tab with a new value in cell B3. Look at how the result in the ‘3D ref’ tab changes. That’s how 3D referencing can help you in advanced financial modelling!
About this financial modelling course material
You’re looking at a free online material covering Excel functions, extracted from the financial modelling course.