Using Excel to analyze investments can be very helpful for investors. An investment cheat sheet in Excel allows investors to input key metrics like price, earnings ratios, growth rates etc. and analyze investments quickly. This saves time and helps make data-driven decisions. In this article, we will explore how to make an effective investment analysis template in Excel by looking at useful metrics, graphs and valuation models. Proper use of Excel can aid portfolio management, risk analysis and investment selection.
Key investment metrics to include
Some key metrics to include in an Excel investment cheat sheet are: price, P/E ratio, EPS growth rate, dividend yield, return on equity, debt/equity ratio, analyst recommendations etc. These give a snapshot of valuation, growth prospects, dividend income potential, profitability and risks of stocks/funds. A well structured Excel sheet can display time trends of these metrics too for further insight.
Investment graphs
Investment focused graphs are valuable additions in Excel. Sparklines showing price history, line graphs depicting earnings growth trends over years, pie charts showing sector/country allocations in a fund/portfolio are immensely useful. They supplement the numbers to give the full picture.
Valuation models
Excel valuation models like DCF, Relative valuation can further bolster analysis. Inputting the numbers into these models can give target prices and help ascertain if a stock/fund is undervalued or overvalued. Scenario analysis can also be conducted easily in Excel.
Portfolio analysis features
For portfolio management, useful Excel features are allocation analysis, dividends tracking, risk analysis using statistical tools, return attribution and monte carlo simulations. These provide actionable insights for managing overall portfolio risk and return.
Keeping the sheet updated
While the Excel investment cheat sheet provides analytical power, it needs regular updating with latest data for relevance. Macros can help automate some of this. Cloud linking the sheet to online data sources is also an option. Overall, some manual efforts cannot be avoided.
An Excel investment cheat sheet can empower investors by bringing in key metrics, graphs and analytical models pertaining to investments in one place. This allows quicker analysis. Useful features for portfolio analysis are also available. To realize full benefits, regular updating with new data is essential.