Spreadsheets | Research & Encyclopedia Articles

Traditionally, accountants use a grid of rows and columns printed on special green paper to produce financial projects and reports. An electronic spreadsheet is software that simulates this accountant's paper pad or worksheet. Using spreadsheet software, a worksheet appears on the computer screen as a grid of rows and columns. The software performs calculations based on the numbers and mathematical formulas that users enter into this grid. While the terms worksheet and spreadsheet are used interchangeably, they really refer to different things. The spreadsheet actually refers to the software itself, whereas a worksheet denotes the actual numbers and formulas that underlie a particular task.

The intersection of a row and a column on the worksheet grid is called a cell. Cells are identified by a name that consists of a column letter (A–Z, AA–ZZ, and so on) and a row number. For example, D10 refers to the cell in the fourth column and the tenth row down on the worksheet, and AB45 refers to the twenty-eighth column and forty-fifth row down on the worksheet. Because a worksheet can have thousands of cells, the software allows the user to scroll through the worksheet horizontally or vertically to view the cells.

Cells on a worksheet can be filled with one of four things:

1. nothing (which means that the cell is blank)
2. labels
3. numeric values
4. formulas.

A label in a cell is a descriptive text. Examples of labels include: Units Sold, Revenue, Total Cost, Name, Address, or City. The labels are used to help organize the worksheet. Numeric values refer to the actual numeric data that are used on the worksheet in calculations. Numeric data can take the form of positive or negative numbers, integer numbers, decimal numbers, fractions, or scientific notations.

Formulas are used to indicate how the numeric values are to be manipulated. For example, on a household budget spreadsheet, a formula can be created to add the household monthly expenses and store the results in cell B20. The formula, SUM (B1:B19), would add the values stored in the range of cells from B1 through cell B19. Another formula, B21 B20, could be created to subtract the expenses (in cell B20) from the income (in cell B21) on a household budget spreadsheet. Most spreadsheets also offer a variety of pre-defined formulas, called functions, which effect powerful mathematical calculations. Typically, these functions are divided into a variety of categories, such as financial functions (e.g., depreciation, future value, net present value), date and time functions, mathematical and trigonometry functions (e.g., absolute value, sine, cosine, pi), statistical functions (e.g., average, median, variance, standard deviation), and database functions (e.g., average or count the values in a column).

In addition to these formulas and functions, spreadsheets provide modeling capabilities that allow users to describe real-world situations and then experiment with different numbers. This ability to change numbers involved in calculations and see the immediate results is called "what if" analysis. What-if analysis is a very powerful and useful tool and it is what makes spreadsheet software indispensable. Users can investigate what would happen if sales increase by 10 percent or decrease by 5 percent. Students could examine the implications of an "A" grade on their next examination or a "B" grade. If done manually, each change would require erasing the contents of every cell involved in a formula, changing their numeric data, and then recalculating!

Spreadsheet software also has the capability of charting or plotting data, providing database querying and extracting, and macro building. In 2002 spreadsheet software can chart data in many different ways including area, bar, column, pie, and XY charts. By visually presenting the data in chart format,the data can be readily analyzed and trends spotted. Spreadsheet software in the year 2002 also has elementary database functions. Specific rows or columns of the worksheet can be selected for report production or advanced analysis. A macro is a collection of commands that the spreadsheet software can execute. These commands are written by the user and stored with a particular worksheet. Macros are used to perform repetitive tasks on a worksheet, such as extracting all rows that have an overdue balance and producing a report about it.

In 1978 Daniel Bricklin, a student at Harvard Business School came up with the idea for a computerized interactive visible calculator. Bricklin and Robert Frankston created the first electronic spreadsheet software named VisiCalc, short for "visible calculator." VisiCalc and electronic spreadsheets might never have gained acceptance if it were not for a Massachusetts Institute of Technology (MIT) graduate named Daniel Fylstra. He suggested that VisiCalc should be run on an Apple microcomputer. Bricklin and Frankston programmed the software for Apple microcomputers and Fylstra and his firm, Personal Software, began marketing VisiCalc by placing an ad in Byte Magazine. VisiCalc became an almost instant success in the business community.

In the early 1980s, IBM introduced a microcomputer (IBM-PC) that used an Intel microprocessor. However, due to legal problems, Bricklin and Frankston did not develop VisiCalc for this new microcomputer. Rather, Mitchell Kapor developed another electronic spreadsheet named Lotus 1-2-3 that could be used on IBM's new computer. Kapor's Lotus 1-2-3 spreadsheet quickly replaced VisiCalc as the new industry standard. Lotus 1-2-3 was easier to use than VisiCalc and added charting, plotting, and database capabilities to the software. Lotus 1-2-3 was also the first spreadsheet to introduce naming of cells, cell ranges, and spreadsheet macros.

During the 1980s, many companies introduced new microcomputers, while others created new spreadsheet software. In 1984 Apple Computer introduced the Macintosh. The Excel spreadsheet from Microsoft Corporation was written for the Macintosh computer. Excel used a graphical user interface (GUI) and the mouse. This interface proved very easy to use, much easier than the command-line interface used by Lotus 1-2-3. In 1987 Microsoft introduced a new operating system for the IBM-PC. This operating system, called Windows, incorporated a graphical user interface. Excel was one of the first software products that ran under Windows. By 1989, when Windows had gained wide acceptance in the microcomputer market, Excel began to dominate the market.

In the late spring of 1995, IBM purchased Lotus Development Corporation. In 2001 Microsoft Excel was the market leader in spreadsheets.

Charles R. Woratschek and Terri L. Lenox

Decision Support Systems; Information Systems; Productivity Software.

Laudon, Kenneth C., Jane P. Laudon, Peter Weill, and Carey Butler. Solve it! For Windows, Version 2.9 Millennium. Hudson: Azimuth Corporation, 1992–2000.

Power, D. J. "A Brief History of Spreadsheets." DSS Resources. <www.dssresources.com/history/ss history.html>

This complete Spreadsheets contains 1,069 words. This article contains 1,103 words (approx. 4 pages at 300 words per page).