Working with Flags

One practice established among Excel power-users is to use "1" and "0" within data tables to indicate a "yes" or "no" or similar two-way attributes. The usage of such "binary" flags will be explained in this article.

Ordinary users of Excel can be confused by this way of using "1" and "0" instead of writing "yes" and "no". But there is one compelling argument for binary flags: They make things less complicated.

Using binary flags in formulas

Some users will tend to write things like "yes" or "no" into cells, and then use formulas like:

=IF(C9="yes";5000;0)

But instead, if C9 (in this example) would contain a 1 instead of "yes", the formula could be written like this:

=C9*5000

That will not make much of a difference for only one cell, but as soon as your model grows bigger, this little trick will give you a great speed advantage.

Using binary flags in time lines

Taking the idea one stap further, it is very common to use binary flags in time lines. For example, imagine a scenario in which certain fees are incurred monthly, but only paid out quarterly:

Excel: Time Line Flags

Quick sums with flags

Binary flags can be helpful for quickly calculating sums that you can use for further calculations. Imagine the following example: Your model is supposed to illustrate the construction and operation of a wind park. The wind park will be divided into 4 equal clusters which will be finished and put into operation separately over time. If you use binary flags to indicate when they will generate electricity, you can easily calculate the total output of the wind park like this:

Excel: Sums with Binary Flags

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