Iserror is an Excel function that regularly gets comments on our financial modelling courses. It’s a simple function to employ. If you’ve got multiple checks in a large spreadsheet, Iserror will tell you whether you’ve got any problems anywhere in your model. It will help identify any #DIV/0, #REF! errors in your model as soon as you accidentally create them. If you’re going to use Iserror to consolidate and identify any modelling problem areas, make sure it’s somewhere in your model that is easily visible (e.g. a ‘locked’ area at the top LHS of your spreadsheet).
Excel’s Iferror function
Iferror can be useful for where you’re crunching a lot of financial modelling ratios (e.g. price/ earnings ratios). If you have zero earnings, you still want any sector average price/ earnings ratio to calculate.
See the spreadsheet for an example where you can see the Iferror function helping in a case where we’ve got zero earnings. The cell to focus on is B18.
In the next course lesson
Next we look at Excel’s Sumif and Sumproduct functions.
About this online financial modelling course material
You’re looking at a free online course extract covering the most important Excel functions.