Modelling best practice - referencing cells

Mutley007

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Jan 19, 2015
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Am working on a standard leveraged buyout model. Quick question. I am creating a formula on Sheet A ... what is best ... referencing the input cell directly on another sheet (sheet B) or referencing the same value from elsewhere on Sheet A (which the input has already fed into)? What is considered best practice ..? One method is more consistent and perhaps allows easier auditing ... but the other allows the user to see what is happening on the same sheet without having to constantly go to other pages?
 

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I believe you've identified the pros and cons of those two options pretty well:

Referencing the input cell on Sheet B is more consistent and more robust in the event of changes than the indirect reference.

The indirect reference to the same value on Sheet A may be easier for the worksheet user to follow.

I'm not aware that there is a consensus best practice, but I'd recommend a third option: Defined a Name for the input cell on Sheet A, then use that Name throughout the workbook to refer to the value in the input cell.
 
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