A circular reference occurs when a cell in an Excel 2010 worksheet refers to itself, whether directly or indirectly. For example, if =100+A2 is entered into cell A2, then a direct circular reference has been created. Click Help to access the Help system Circular Reference topic. This is a companion video to show how to turn on iteration on a Mac so that the time stamp function for attendance will work. Excel Tutorial Circular Reference. Off History Help.
For removing all formula references but keep values in cells, this article will show you methods to achieve it.
Remove all formula references but keep values in cells with copying and pasting
Remove all formula references but keep values in cells with only one click
Please do as follows to remove all formula references but keep values in specified cells in Excel.
1. Select the cells you need to remove all references, then press Ctrl + C keys, keep these cells selected, right click and select Values under Paste Options section. See screenshot:
Then you can see all formula references of selected cells are removed immediately, and only kept the cell values as below screenshot shown.
Here I recommend you the To Actual utility of Kutools for Excel. With this utility, you can quickly remove all formula references but keep values in selected cells with only one click. Please do as follows.
Before applying Kutools for Excel, please download and install it firstly.
1. Select the cells you need to remove references, then click Kutools > To Actual.
Then you can see all formula references of selected cells are removed immediately, and only kept the cell values. See screenshot:
If you want to have a free trial ( 30-day) of this utility, please click to download it, and then go to apply the operation according above steps.
A circular reference is when a cell refers to itself directly or indirectly.
In most cases, a circular reference should and can be avoided with some planning. However, in a complex financial, I found it easier to just use circular references in certain areas.
Circular references are used to help calculate cash balances. Let’s walk through two typical cases.
The cash sitting in the bank generates interest. The interest income is taxed and lowers the net income. More cash -> more interest -> more tax -> lowers net income -> effects cash.
See the example below. To determine the amount of interst, we use an average of the forecasted beginning and ending cash balances. It’s not fair to use just the beginning or the ending cash balances to calculate interest because over the time period that balance will change.
Think about it another way, if you have $100 in the bank at the beginning of the month and $200 at the end earning 2% a month, what should the interst earned be? $2 of $4? Neither, it should be something in the middle because your cash blance grew during the month on its way to $200. So for simplicity of forecasting, we just average the beginning and the end and say $3 ($100+$200)/2 * 2%. It’s not perfect, but it’s a step in the right direction.
The amount of cash shoftfall determines the borrowing needs which determines the interest expense which determines the amount of debt.
You have to check “Enable Iterative Calculation” in Excel Options -> Formulas -> “Enable iterative calcuation”
Maximum iterations should be 100 (default).
This happens pretty often as you’re developing your model because if you pass an error into a circular reference, by definition it won’t be able to solve the equation.
See the example below. All the forumlas are correct, but somewhere in the process there was a mistake made and it threw off all the calculations.
You can resolve this with a commonly used “jumpstart”. All bankers use this, so it’s not some random hack. Jumpstart is a two-part formula you stick into cell where there an error would throw off the ciruclar reference.
The first part is to define a cell called jumpstart and the value will be TRUE or FALSE.
The second part is to change a row of your formulas to incorporate jumpstart. In the example below, we’ve incorporate into the average cash calculation by changing it to =IF(Jumpstart,1,(C42+C40)/2) instead of =(C27+C25)/2
This means if Jumpstart is TRUE, insert 1, otherwise calculate the average. By inserting the 1, it allows the calculations to work again…by giving the calculation a “jumpstart” with a value instead of an error.
To see Jumpstart in action
1. Change the FALSE next to “See Error” to TRUE and then back to FALSE. This simulates as if an error was made and then corrected.
2. Change the FALSE next to “Jumpstart” to TRUE, this will fix the errors by making the average cash $1.00. Change back to FALSE (to turn off Jumpstart) and it will revert back to normal calculations.
** Modeling Tip – If/Else is a powerful forumla. Learn it and use it.