No heavy theory or valuation controversy today: this is a meat-and-potatoes post about how to both save time and eliminate errors in the quantitative (spreadsheet) parts of your reports. It boils down to two rules:
Unique inputs should only be entered once in a spreadsheet.
Never enter a value that can be calculated by a formula.
A unique input is a specific value (e.g. 2007 cost of sales or the size premium component of the equity cash flow discount rate). If it is used more than once, subsequent references should be linked to the original input cell. I highlight original input cells using blue font; subsequent references and formulae are in black. (I do not use color in my reports.)
Why enter gross profit when it can be calculated as sales minus cost of goods sold? This also double-checks your source document; once in a blue moon you find inconsistencies.
Putting the two rules together, link related spreadsheets (or put them in one big one, which I call a super-worksheet). In my financial analysis template, I enter unique inputs for the income statements and balance sheets and calculate cash flow statements (and cash flow to equity) automatically. Another table builds up the discount rate. A third one automatically calculates the DCF valuation (with original input cells for non-operating assets and liabilities, and shares outstanding if I need it). My comparative financial analysis works the same way; company ratios are calculated from the financial statements and I input just the RMA or other industry data.
This gives you an efficient, integrated system of individual spreadsheets / tables. If you use Microsoft Office and your report template is in Word, you can insert individual spreadsheet tables in the Word document. (In Excel, highlight the table, Edit, and Copy it. In Word, Edit, Paste Special. For small tables, select Microsoft Excel Worksheet Object. For those that are too big to fit the page, select Picture (Enhanced Metafile). Once entered into the Word document, you can center them.) When done with all of this, at the end of your report, in Word, Insert Object – Create From File – Browse (select the super-worksheet) – Display As Icon and you will have a complete version of the super-worksheet embedded in the Word file and available to click on and open.