Dynamic Array Models that will blow your mind

I often talk on LinkedIn about dynamic arrays. Today I thought I would show just a simple model I've built so you can gain the appreciation of what can be done with dynamic arrays. So what we have here is we have a model, simple discounted cash flow with some very basic assumptions. The model year counting period zero has 16 periods. A discount rate at 10%, you'll see, starts with the revenue of 2,200. In year one, the annual revenue growth rate for this project is growing at 25%. Expenses are 40% of revenue, has an initial investment of 75%. And what I really want to show here is just what you can do with dynamic arrays. So you can see right now this is 15 years out. You can see the net present value is $11,000. The internal rate of return is 39%. And you can see all the other different methods, you can see the formulas and kind of an explanation here. But what I want to show is, and this is the real power of dynamic arrays, let's say I want to play with this and really we want to see, well, what's it look like if it's a 10 year investment or let's say 11, so it's 10 years because you want period zero automatically adjusted there you could see, all right, I changed the discount rate, right? Everything adjusted. I can come in, say the revenue started at 1900, the growth rate is going to be lower. So the growth rate's really only 10%, expenses are 60% and the initial investment is $10,000. And let's run this out now. Let's say I want to see what does it look like for 20 years or 20 periods. So you can see that automatically adjusted. And that's what you can do with dynamic arrays. You're going to notice these formulas here, you can see particularly if we take a look at this one, we're taking all these dynamic arrays and just it's all one formula saying hey, take B13 minus B14 minus B15 and give me the gross profit. And that pound means use the dynamic array. So you could see here, build a simple model that can automatically update here another example of the power of dynamic arrays. So we'll show one other is sensitivity analysis. So you see here I have a simple sensitivity analysis where what it's doing is it's saying hey, at all these parameters. And we'll enlarge this so you can see the parameters here at each of these parameters, what happens in the model. And so let me enlarge this as well. And so what it's doing is it's saying, look at 5,000 units sold, what will be my gross profit, assuming I charge a price of $8 and my cost of goods sold is $6. And then it goes up by 10 cents. Down by 10 cents. You can see each of these. And I see, okay, what's the margin? See the margins? Anywhere from 25 to 45%, basically. Actually a little less than 25, sorry, all the way down here it goes anywhere from 2.5% all the way up to 45. And so what we can do is we can play with this and say, all right, well, I want to see what happens if I sell 10,000 units. You can see it automatically updated. So you can see the formula here is taking each of these ranges, subtracting them, and then timesing it by the unit. So it's basically taking the contribution margin. And I have. What's my worst case? I can see I'll start with my worst case. My worst case is 850. So it starts there. My worst case COGS is maybe 550. I want to increment this at a certain number. And so all by just using sequence formulas and a couple, you know, simple formulas. I can create this dynamic table and then use conditional formatting. So that's all I want to show today is just a quick example of how dynamic arrays, in two different scenarios, you can build tables to automatically adjust. And so let's show another example of what I mean by adjust. Let's change the price increment to 5. Notice it's now 5. Let's change this to 5. Right. So it's dynamically resizing. I'm not having to do any formulas just from a dropdown. So if you're not using dynamic arrays today, I hope these examples will encourage you to learn them. Great book to learn. Dynamic arrays is up up an array. Really highly recommend it. It's one I've been reading. I read it on the airport today. All right, Hope you enjoy this video as much as I did recording it. Thanks.