To keep the percent change formula from returning errors and/or extreme values, consider a nested IF statement to trap errors or values that fall outside of a certain range. In the example below, "n/a" refers to "not applicable". Errors have been trapped in lines one through three. In line four, the formula returns "n/a" because the absolute value of the change is greater than 200%. This logic is written into the formula to prevent it from returning exteme values.

The formula in G4 is below. It is copied from cell G4 into cells G6, G8, G10, and G12.

=IF(ISERROR((E12-F12)/ABS(F12)),"n/a",IF(ABS((E12-F12)/ABS(F12))>1.999,"n/a",(E12-F12)/ABS(F12)))

Unfortunately Excel's goal seeking feature forces you to hand-enter a value into the "To value" field of the input box. You can't directly tie this input to a cell like you can with the "Set cell" and "By changing cell" inputs (see the screenshot below).

This can make things difficult especially if you're trying to seek very large values or values that that are carried out to many decimal points.

The following procedure allows you to get around this limitation. First, enter the cell addresses for the variables called Rng1, Rng2, and Rng3. Note that a formula must appear in Rng1 and a value must be entered into Rng3. Next, run the procedure.

Sub GoalSeek()

    Dim Rng1 As Range
    Dim Rng2 As Range
    Dim Rng3 As Range

    On Error GoTo errHandler:

    'Set the value in this cell
    Set Rng1 = ActiveSheet.Range("C4")

    'Equal to the value in this cell
    'Note:  This cell must contain a formula
    Set Rng2 = ActiveSheet.Range("C7")

    'By changing the value in this cell
    Set Rng3 = ActiveSheet.Range("C2")

    If Rng1.HasFormula = True Then
        If IsNumeric(Rng3) = True Then
            Rng1.GoalSeek Goal:=Rng2, ChangingCell:=Rng3
        End If
    End If

    Exit Sub

errHandler:
    MsgBox "Procedure failed - please check inputs."

End Sub

Over time I've found that the interpretation of percent change is one of the most simple and misunderstood calculations in finance. As an example, take the following data:

The formula in cell C3 is

=(B3-B4)/B4

This is the formula that I've found most people use. The formula works great when you're comparing positive numbers. However, a problem occurs when you bring in the negatives. Looking at cell C11, is it correct to say that the increase from -45 to -35 is -22.2%? If -35 is a larger number than -45, how can the increase be a negative?

If you look at all numbers, positive and negative, as being on a single scale the calculation is easier to see. Now we'll take the same data above and apply a slightly different formula:

The formula in cell C3 is

=(B3-B4)/(ABS)B4

When you look at column C, all of the percent increases are positive percentages. Likewise, when you look at column D all of the percent decreases are negative percentages. Positive percentages correspond to moving up the number scale and negative percentages correspond to moving down the number scale.

To conclude, the formula that includes Excel's ABS function is the correct formula. The ABS function insures that the denominator in the formula is always positive which allows the formula to return the correct percentage change. If you use this formula and think of the number scale, you'll never have to worry about the calculation of percent change and / or how to explain it to those that may not understand how to interpret it.

Recently the topic of primary and secondary axis scales was discussed at the PTS Blog. The discussion starts with a reference to Stephen Few's March 2008 Visual Business Intelligence Newsletter titled Dual-Scaled Axis in Graphs - Are They Ever the Best Solution . Stephen starts his article by concluding that He then goes on to cite a series of examples. Finally, at the end of his article he states that "I certainly cannot conclude, once and for all, that graphs with dual-scaled axes are never useful; only that I cannot think of a situation that warrants them in light of other, better solutions. I invite you to propose viable exceptions, which I will welcome with open arms."

From a healthcare finance perspecitive, it has been my experience that these charts are great tools for those who know how to build them and for those audiences that know how to interpret the underlying data. Below are several comments I have concerning Stephen's article:

Comment #1 - It's not necessarily the chart with two axes that's bad, it's the data behind it. In the newsletter, most of Stephen's graphs illustrate the relationship between revenue and units sold. I would argue that is comparison is flawed from the beginning and, as such, this type of chart should not be used. My reasoning is that, although it seems like the data is should be related, when you drill down into the data you might find out that the correlation is not as close as you might have thought. Depending on the data:

• What defines a unit?
• Are the units the same unit each quarter or are there multiple types of units being charted as one?
• If there are multiple units, how are the changes in volume accounted for within the sales mix?
• Won't price increases distort the data over time?
• How does the chart account for decreases in purchasing power over time i.e inflation over time?
• If the data is measured by quarter and one of the quarters includes a leap year, how do you account for the extra day?

In my opinion, I think an argument can be made that a dual axis chart showing revenue and units sold is probably not the the best use of a dual-axes chart. That being said I do have to admit that I do use this type comparison at a top-level where the components of variance might be considered immaterial. If a dual-axes chart is to be used the audience should be educated on how to interpret the underlying data and how to recognize and address possible flaws before decisions a made.

Comment #2 - If you are going to present a dual-axis chart, the axes need to be proportional. That means doing the math for each axes to make sure it is in fact proportional to the other.

Comment #3 - As Stephen observed, line graphs are the best presentation for this type of chart.

Comment #4 - "I can’t think of a single case when there isn’t a better solution than a graph with a dual-scaled axis." In my line of work, we've found that these graphs are very useful for auditing calculations. For example, you are tasked with building a projection of revenue and discounts for the next year. In a healthcare environment, revenue and discounts both contain the same components of variance i.e. work days, fee increases, volume changes, payer mix changes, and changes in service mix or acuity. The calculations the build all of these components can get very complex. Rather than attemping to proof each calculation that builds the projection, this chart can quickly pick up areas of possible error.

In the example below, it's obvious that there's problem with June calculations because the lines are not in sync for that month.

Comparing the growth in same-type volumes (for example Radiology vs. Laboratory volumes) is another example.

To conclude, there may in fact be better charts for displaying certain types of data. But if the audience understands the relationships between the data I think there is a place for these charts. And like the example above shows, there's most definitely a place for these charts when performing audits.

To add images of embedded charts to this weblog, I use the VBA procedure below. To run the procedure, first make sure the specifications are correct. You can make changes to the chart height, width, file name, and file path. When all of the inputs are correct, click on (activate) the embedded chart and run the macro.

Sub ExportChart()

    Dim Cht As ChartObject
    Dim Path As String
    Dim FileName As String
    
    Set Cht = ActiveChart.Parent

    Cht.Height = 210
    Cht.Width = 336
    FileName = "2008032301.gif"
    Path = "C:\Program Files\"
    
    ActiveChart.Export Path & FileName

End Sub

Please note that the height and width are not really needed. I've added this code only because I like to make sure all of the charts are exactly the same size.

Gross revenue can be simply defined as charges billed. Net revenue, on the other hand, is more reflective of the revenue you expect to actually receive. In a healthcare environment, the spread between gross and net revenue can be fairly significant depending on who pays the bill.

A bar chart provides a simple visual comparison of gross vs. net revenue. Although the stacked bar chart initially seemed like the best choice to me, over time I've found that a regular bar chart with the bar overlap set to 100% works well too.

In this example, the goal is to chart the change in gross and net revenue in the Commercial / Contract and Government areas for the annual periods 2006 and 2007. Below is how I've set up the data:

The Chart Wizard produces the following:

The next task is to overlay the bars by setting the overlap to 100%. To do so, go to the Format Data Series dialog box - Options tab and change the overlap to 100%.

Finally, with a series of minor formatting changes the chart looks like this:

The chart shows the following:

• The Government area is above the blue line and the Commercial / Contract area is below the blue line.
• The Commercial / Contract revenue grew while the Government gross revenue showed no increase and reimbursement decreased.
• The Commerical / Contract reimbursement is significantly higher than the Government reimbursement. As a result, the Commercial / Contract area looks much more attractive from a financial perspective.