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Compare positive and negative numbers

Tools: Function ABS

Level: advanced

Problem

Your company has a revolving credit line from its bank. It can borrow from bank up to a certain limit whenever your company needs cash. Every time your company has excess cash that exceeds one month of projected expenses, it pays this bank loan off – provided it still owes anything to the bank. You calculate or get from external source the loan balance and you have your company's cash position. However, the cash position is a positive number and loan balance is a negative number. If loan balance is zero, then there is no payment due, but if it is negative, then you pay the smaller of either your cash balance or sum needed to bring the loan balance to zero.

	A	B	C	D	E	F	G
1	Cash balance	314	254	496	24	356	48
2	Loan balance	-395	-461	-336	-181	-279	-232
3	Payment	314	254	336	24	279	48

While it sounds and looks simple from a common sense standpoint, it is mind-twisting when it comes to setting up the math. How do you calculate what your company can pay the bank if it has to pay the bank at all?

Solution

We need to compare not cash and loan numbers but moduli of these numbers (modulus is a term for "absolute value" of the number without regard to the number sign). Then we need to select a smaller value, and this will be the payment.

1. Active cell B3.

2. Type or input =IF( function.

3. Enter ABS(B1)>ABS(B2) as "logical_test". ABS() is a function that returns the modulus of the argument.

4. If cash balance is greater than loan balance, the load balance can be paid off in full. Enter ABS(B2) as "value_if_true".

5. If cash balance is less that loan balance, cash balance goes to pay off the loan in full. Einter ABS(B1) as "value_if_false".

6. Close the bracket of IF function or press Enter, or click OK.

7. Copy cell B3 to range B3:G3.

You completed function will look as

=IF(ABS(B1)>ABS(B2),ABS(B2),ABS(B1))

Formula syntax

Code	Variable	Comment
=IF(		Which is greater, cash balance or loan balance if compared as moduli?
ABS(	Logical_test	Cash balance modulus
B1		Cash balance
)		Function ABS() complete
>ABS(		Loan balance modulus
B2	Number	Loan balance
),		Function ABS() complete
ABS(	Value_if_true	If cash balance is greater, the payment is…
B2	Number	Loan balance as positive number
),		Function ABS() complete
ABS(	Value_if_false	If loan balance is equal to cash balance or greater, the payment is…
B1	Number	Cash balance as positive number
)		Function ABS() complete
)		Function IF() complete