This KS3 ICT quiz is our second on models. Spreadsheets are frequently used for financial information because of their ability to re-calculate the entire sheet automatically after a change to a single cell is made. This is a simple way for businesses to see how small changes to prices or sales could affect their profits and losses.
Models work by taking a set of data and using rules to see how things change. The rules are represented using formulae, for example, profit is equal to the total sales minus the total cost of the wages, raw materials and other expenses. The data required to calculate the result of this formula will be contained in other cells. These can be read into the formula by making reference to the addresses of the other cells. In our example above, if the total sales is in cell B1, the wages figure in cell F8 and the total of the raw materials and other expenses in cell G14, the formula would be =B1-(F8+G14). The parentheses tell the spreadsheet to add the wages and expenses before subtracting them from the total sales.