2. Separating Inputs from Calculations

The formula =B2*C2*0.95*1.08 works, but in six months nobody will remember what 0.95 and 1.08 are, and when a rate changes you'll have to hunt down every formula like it. The rule of a professional model: each parameter lives in one cell.

• Collect the parameters in an input block (here G1:H2) and color it, so it's obvious what can be changed;
• give the cells names: select the cell, type the name in the Name Box to the left of the formula bar, and press Enter. A formula like =D2*SalesTax reads without explanation and doesn't shift when copied;
• calculated columns use one formula for the whole column, with no numbers inside;
• quality check for a model: change a parameter, and everything that depends on it should recalculate by itself.