Xcelsius Journal

The abacus can legitimately be called the worlds oldest calculator, dating back to 300 BC. One of the features of the abacus is that it helps to visualize and manage calculations with large numbers.

In a similar sense, the modern computing tools of today allow us to do the same. I want to show you a calculator tool prepared with Xcelsius that superficially looks like an abacus.

It is a fairly common practice to use spreadsheets for projecting income and expense in a business. A projection by definition is only an estimate, subject to uncertainties.

You may be a Chocolatier planning a new gift item for Mother's Day. You expect to sell 4,000 such items. You know there is going to be some variation; it may be equally likely that you will sell 4,300 boxes as you would sell 3,700. You expect the price to be $12.50, but you have yet to finalize the price. Your price is affected by supplier costs, economic trends, and competition. Right now, you're looking at a variation of plus or minus 25 cents. Additionally, there may be uncertainties in a variety of other expenses.

So I ask you; what is going to be the impact of all of these variations on your bottom line profit? A spreadsheet allows you to try out individual what-if scenarios. It doesn't give you the immediate visual and tangible feel for how your cash flow projection model behaves.

Now take a look at the Xcelsius file (or screen shot). Notice in the upper half of the Xcelsius model you have sliders for your inputs and uncertainties. All you have to do is slide the "abacus style beads" to set the value for each of the inputs in the projection and their corresponding uncertainties.

The bottom half of your Uncertainty Calculator displays items normally found in an income and expense projection. For each of these items you will see three colored beads on the slider. The one on the left (appearing in red) is the lowest value in the projection. Its numeric value is shown on the extreme left of the slider. The bead on the right (green) displays the highest value. Its numeric value is shown on the extreme right. There is a middle bead that displays the baseline value.

There are several things you should notice about this calculator. It is color coordinated. We could have shown the numeric value for the baseline (middle) bead. I chose not to do so to avoid creating clutter. If you feel the display of the baseline values is important, you may want to consider using a Check Box component or a List Box that's provided with Xcelsius. I will explain more about these components and their use in upcoming articles. Suffice it to say "Selector" Components are handy when you have to go beyond the simpler calculators and manage complex models.

If you want to use components like Check Boxes or List Boxes in our example calculator, where would you put them? You don't want the calculator to appear too busy. Notice on the top right hand corner, there is a Text Area that provides some documentation. You could replace this narrative with the components. Better still, you could create a toggle that can switch between the narrative intro and the list boxes. In next month's newsletter, I'll provide a sample that does this.

There's something I want you to notice. The sliders used for setting the uncertainty values (orange beads) are all drawn to scale. In other words, the slide range of the uncertainties match the slide range of their respective baseline number. You have to decide if you want these scaled identically. If you know in advance that the values in your slide is going to change very little, such as 25 cents on $12.50, you may not need the full length of the slider. Changes of this kind could free up "real estate space" on the screen and help prevent a cluttered calculator.

In summary, Xcelsius gives you a lot of latitude and control over what information is displayed and how your model works. The best way to put these features to use is for you to try them out and experiment. You will quickly find that once you settle on effective techniques, you will put them to effective use in many other Xcelsius models.

The files referenced in this article can be found in the Article Reprints section of: http://www.xcelsiusbestpractices.com

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