When you deal with spreadsheets like Microsoft Excel, circularities or circular references may lead to significant problems. Circularities in spreadsheets occur when one code requires information from another code, which requires the information from the first code. Patrick Burns, in his article on ‘Spreadsheet Addiction’ says that the spreadsheets that are available today, including Microsoft Excel and Works, have limitations in terms of operational risks. He goes on to say that some of the spreadsheets in the market available today will go obsolete due to lack of Sarbanes-Oxley compliance.

Many vendors, such as Spreadsheet Advantage (www.Spreadsheetadvantage.com), are there to help you deal with circularity in spreadsheets. Since you have to calculate iteratively when you deal with a spreadsheet with circularities, you might witness higher recalculation time, sometimes ending up with incorrect solutions.

If you are dealing with a large spreadsheet, tracking down all the circularities would be a tedious task. Custom-built software solutions to track down circularities is able to fetch you the circularities in minimal time. All you need to do is submit your spreadsheet containing circularities to the circularity finding software and the software will generate a list of all the circularities in your spreadsheet. Software solutions from vendors such as Advantage for Analysts (www.advantageforanalysts.com) include capabilities like handling circularities in spreadsheets, goal-seeking and optimization.

Circularity in Spreadsheets: An Example

The following table is an example circularity report generated by Circularity Finder, software from Spreadsheet Advantage. The table lists five circularities.

Cliff T. Ragsdale, Department of Business Information Technology
Virginia Polytechnic Institute and State University, Blacksburg, USA, presents a new approach using circularities and array formulas to implement project management systems. Cliff’s formula helps in determining the critical activities in a project network, irrespective of the amount of activities involved in the project.

Circularity in spreadsheets is often used intentionally to solve critical issues. Although it may be easy to get answers from a spreadsheet, it may be difficult to get the right answers when circularity in spreadsheets is involved.

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