In the last Personal Computer column I talked a bit about VisiCalc, the most famous name in personal computer software. I told you how it made the micro computers a tool that revolutionized the small business because it transformed all those memory chips into an "electronic spreadsheet."
Having said that, this time I ought to give you some idea of how an electronic spreadsheet works.
You probably know what an old-fashioned spreadsheet is: that large sheet of paper filled with ruled lines up, down and across.
The businessman fills it with penciled-in figures on sales and such things to keep track of how his business is going and what he should be doing differently to make it better. And that's where the headache comes in. Because it takes hours of work to prepare, what with all the the multiplication, addition, division and subtraction necessary to arrive at the finished product -- the "bottom line," as is called.
What's more, after doing all that calculating, it's not uncommon for the businessman to discover that the answer arrived at is wrong because somewhere a mistake was made.
That's where the electronic spreadsheet concept is revolutionizing the small business. It has not only put to work the computer's ability to do repetitive, mind-numbing work without mistake but it also has made it possible for the businessman who knows nothing about computer languages to program his computer to do what he wants it to.
Now all he has to do is type the raw data into his machine.
Let's examine a simple situation that a real estate investor might confront. Say the investor is considering purchasing a house, and she not only must arrange for a mortgage, but she's also must borrow money for the downpayment. Let's say she's also going to look not just at one house but at many.
Crucial to her is how much the house will cost in monthly loan payments.
While the house prices inevitably will vary, the calculating routine she must follow to arrive at her "bottom line" is going to be the same for each house. She calculates how much cash she will need for the downpayment by multiplying each house's cost by .20 (the standard 20 percent downpayment). Then she subtracts that figure from the house cost to find out what the mortgage amount will be. Then she calculates the monthly mortgage payment on the mortgage principle and the downpayment, and then adds them together.
Without a computer, she might be willing to do that a couple of times without complaint, but it won't take long before she wishes for a simpler way.
Enter the electronic spreadsheet.
The investor turns on her personal computer and slips in the disk that contains the software program -- like VisiCalc -- that makes it easy to instruct the computer on how to process the information she's going to give. She then sets up a format on the video monitor that she likes (see illustration), even adding titles if she wants. Then she tells the computer that, when she types in a figure on a certain line (say, the cost of a house), the computer is to multiply it by .20 to get the downpayment.
She does the same thing for each of the routine calculations she needs performed, until finally instructing the computer to add the two mortgage payments it has calculated to give her her total monthly cost.
What she has now is a computer routine that requires her only to enter the raw data for each variable. The computer will do all the calculating work in a matter of seconds.