Below is an Excel model which forecasts the quarterly and yearly profit for a re

Question

Below is an Excel model which forecasts the quarterly and yearly profit for a retail firm ABC Ltd, based upon the following requirements:
The model needs to show forecast profit for the next 4 quarters (Q1, Q2, Q3, Q4)
The first quarter's revenue is $50,000 and the revenue is forecast to grow by 8% per quarter
The Cost of Goods Sold (COGS) is 20% of revenue
Other expenses are $20,000 and are expected to grow at 6% per quarter.
What is the best formula in C19?

A. $C$18*$B$4
B.   C18*$B$4
C.   C18*B4
D.   $C$18*B4

INPUT $50,000 2 Revenue 3 Revenue Growth 4 COGS 5 Other Expenses 6 Expenses Growth 8% per quarter 20% per quarter $20,000 6% per quarter 10 11 Revenue 12 Revenue Growth 13 COGS 14 Other Expenses 15 Expenses Growth 16 17 18 Revenue 19 less COGS 20 Gross Profit 21 Other Expenses$ 22 Profit 23 $50,000 8% 20% $20,000 6% TOTAL 01 $50,000$54,000 $58,320 $62,986 $225,306 10,000 $10,800 $11,664 $12,597 $45,061 40,000$43,200 $46,656 $50,389 $180,245 $20,000 $21,200$22,472 $23,820$87,492 $20,000 $22,000 $24,184 $26,569 $92,753 Q2 03 04

Explanation / Answer

A. $C$18*$B$4

With $ , it maintain the original cell reference . Otherwise by default cell reference is relative.So if you moves the contents of C18 or B4, with relative cell reference , the result is not correct. Also mixed reference can create error. So absolute column $C ,$B and absolute row S18,$4 is the best option to choose.

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