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The Corporate Finance Institute Excel
Step 5: Exact or approximate match
This final step is to tell Excel if you’re looking for an exact or approximate
match by entering “True” or “False” in the formula.
In our VLOOKUP example, we want an exact match, so we type “True” in the
formula.
An approximate match would be useful when looking up an exact figure that
might not be contained in the table, for example, the number 2.9585. In this
case, Excel will look for the number closest to 2.9585, even though that
number is not contained in the dataset. This will help prevent errors in the
VLOOKUP formula.
Learn how to do this step by step in our Free Excel Crash Course!
VLOOKUP in financial modeling and financial analysis
VLOOKUP formulas are often used in financial modeling and other types of
financial analysis to make models more dynamic and incorporate multiple
scenarios.
For example, imagine a financial model that included a debt schedule, and the
company had three different scenarios for the interest rate: 3.0%, 4.0% and
5.0%. A VLOOKUP could look for a scenario, low, medium or high and output
the corresponding interest rate into the financial model.
As you can see in the example above, an Analyst can select the scenario they
want and have the corresponding interest rate flow into the model from the
VLOOKUP formula.
Learn how to do this step by step in our Free Excel Crash Course!
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