# First and Last and Always

So you need to interpolate between two data points, which may not always occur at the same points and / or intervals. Here’s some practical tips by Liam Bastick, Managing Director (and Excel MVP) with SumProduct Pty Ltd.

Let’s imagine you have prepared a set of reporting dates and the known amounts presented at irregular reporting dates:

### Requirement Excerpt

The challenge here is to create one unique formula that can be copied down a column to linearly interpolate based on the number of days, *viz*.

### Illustration

The conditions are:

- There should only be one unique formula, copied down the column
- No array (
**CTRL + SHIFT + ENTER**) formulae allowed - No macros or user-defined functions.

The reason for this is purely because of its practical implications. For those working in finance, often projections will be made periodically, but not necessarily for every date under scrutiny. Therefore, you need to identify an “on-track” value with each date to identify significant variances quickly.

Assuming a straight-line method of projection, this approach to predicting values between two points is known as **linear interpolation**. Consider the following example:

### Linear Interpolation

If **a **and **b **are points in time (say) and **f(a) **and **f(b) **are their corresponding values, then the linearly interpolated output of **x **(where **a ? x ? b**), **f(x)**, is given by the equation

This is all we need to create our formula, with **x** as our date and **f(x)** the corresponding value. All we need to determine are the following:

- The date of the last value actually input (
**a**) - The value of the last value actually input (
**f(a)**) - The date of the next value actually input (
**b**) - The value of the next value actually input (
**f(b)**).

Before you all write in and tell me I am over-complicating matters, I want to demonstrate how to look up both the next and last values in a table as these are important tricks in financial modelling in their own right.

In our example, our problem was made more difficult in that any cell in the input data table could have a value entered so we needed to treat **a** and **b **as variables. This requires us to use three functions: **INDEX**, **MATCH** and **LOOKUP**.

**INDEX **and **MATCH **have been discussed before (please see >this article for more details), but unbelievably, I haven’t yet discussed **LOOKUP**. I had better put that right now!

## Aside: Introducing LOOKUP (if there’s anyone out there that doesn’t know it…)

**LOOKUP** is quite useful for modelling. It has two forms: an array form and a vector form. I suppose I had better explain the jargon:

- An
**array**is a collection of cells consisting of at least two rows and at least two columns - A
**vector**is a collection of cells across just one row (row vector) or down just one column (column vector).

The diagram should be self-explanatory:

### Arrays and Vectors

The array form of **LOOKUP** looks in the first row or column of an array for the specified value and returns a value from the same position in the last row or column of the same array:

LOOKUP(lookup_value,array)

where:

**lookup_value**is the value that**LOOKUP**searches for in an array. The**lookup_value**argument can be a number, text, a logical value, or a name or reference that refers to a value**array**is the range of cells that contains text, numbers, or logical values that you want to compare with**lookup_value**.

The array form of **LOOKUP **is very similar to the **HLOOKUP **and **VLOOKUP **functions. The difference is that **HLOOKUP **searches for the value of **lookup_value** in the first row, **VLOOKUP **searches in the first column, and **LOOKUP **searches according to the dimensions of array.

If **array **covers an area that is wider than it is tall (i.e. it has more columns than rows), **LOOKUP** searches for the value of **lookup_value **in the first row and returns the result from the last row. Otherwise, **LOOKUP **searches for the value of **lookup_value** in the first column and returns the result from the last column instead.

The alternative form is the vector form:

LOOKUP(lookup_value,lookup_vector,[result_vector])

The LOOKUP function vector form syntax has the following arguments:

**lookup_value**is the value that**LOOKUP**searches for in the first vector**lookup_vector**is the range that contains only one row or one column**[result_vector]**is optional – if ignored,**lookup_vector**is used – this is the where the result will come from and must contain the same number of cells as the**lookup_vector**.

Like the default versions of **HLOOKUP **and **VLOOKUP**, **lookup_value** must be located in a range of strictly ascending values, i.e. where each value is larger than the one before and there are no duplicates.

Let me demonstrate with the following example (the full set of examples may be found in the attached Excel LOOKUP file):

### Example

Imagine you have an annual model forecasting for many years into the future. Creating inputs will be time consuming if data has to be entered on a period by period basis. But there is a shortcut.

Do you see the data table in cells **F12:K13** above? The value in the final cell of the first row is actually “2020” not “2020+”. It appears that way due to custom number formatting (**CTRL + 1**):

### Format Cells

The syntax “0+” adds a plus sign to the number although Excel still reads the value as 2020.

The formula uses the array version of **LOOKUP**, looking up the year in the first row of the data tabe and returning the corresponding value from the final row. When a year is selected which is greater than 2020, the 2020 value is used as **LOOKUP **seeks out the largest value less than or equal to the value sought. Therefore, we don’t need to have lengthy data tables – once we assume inputs will be constant thereafter, we can just curtail the input section.

Using the array form of **LOOKUP **is dangerous though. What if someone accidentally inserts rows? The lookup will “flip” to look the first and last columns instead, which is not what is required. Using the vector form is safer:

### Example (Continued)

Whilst the formula contains one more argument, the formula is more stable. Further, the **lookup_vector** and the **result_vector** do not need to be in the same worksheet or even the same workbook. In fact, as long as there are the same number of elements in each, one can be a row vector and the other a column vector.

**LOOKUP **is very useful when the **lookup_vector **contains data in strict ascending order. Where do we find this? Dates in time series – **LOOKUP** is very useful for financial modelling / forecasting. Just be careful though; consider the following scenario:

### Example (Continued)

Here, the same formula generates an #N/A error. This is because the date is smaller than the smallest value in the data range. **LOOKUP **is not quite clever enough to use the first value unprompted, but a simple tweak of the formula will suffice:

### Example (Continued)

Here, the formula has been modified to:

=IF(G$19<$G$12,$G$13,LOOKUP(G$19,$G$12:$K$12,$G$13:$K$13))

The added **IF **statement checks to see if the year is smaller than the first year in the data table and if so, returns the first result. Simple!

It is with this final modification – in its vector form – that I usually use **LOOKUP **to return values for certain time periods where I do not want to have an input for each period modelled. Very useful!

## Back to the Problem…

To recap, if **a **and **b **are points in time *(say)* and **f(a)** and **f(b)** are their corresponding values, then the linearly interpolated output of **x** (where **a ? x ? b**), **f(x)**, is given by the equation

As stated above, we need to determine the following:

- The date of the last value actually input (
**a**) - The value of the last value actually input (
**f(a)**) - The date of the next value actually input (
**b**) - The value of the next value actually input (
**f(b)**).

Let me explain how to get the values.

### The value of the last value actually input (f(a))

Perhaps this is the most awkward formula to understand. The formula is given by:

=LOOKUP(2,1/(Range<>””),Range)

In our example (see Attached Excel Example Solution File):

### Finding the Last Value Actually Input

So how does this work?

I thought it was obvious (!). The **1/(Range<>””)** portion returns an array that contains a 1 (TRUE) or 0 (FALSE) value only for each cell in the **Range**, depending on whether that cell is blank or not.

The next step is to use the 1 or 0 values as the **Denominator** in **1/Denominator**. This calculates the inverse value, and you end up with either 1 (1/1) or a #DIV/0! error (1/0). Since the value being searched for in the array is the value 2 – and does not exist – the **LOOKUP **function actually ignores all the error values in the array, returning the last array element that contains a 1 value instead. This corresponds to the last cell in the **Range **that is non-blank.

Who’s for “Blah, blah, blah, just use this formula when you need it”..?

### The date of the last value actually input (a)

This is actually simply a modified version of the above formula using the **LOOKUP **formula with two ranges, viz.

=LOOKUP(2,1/(Range1<>””),Range2)

In our example (see Attached Excel Example Solution File):

### Finding the Last Date Where Data Was Actually Input

Next!

### The value of the next value actually input (f(b))

As mentioned above, we have explained **INDEX **and **MATCH **before, but the idea is similar to the above **LOOKUP **formula:

=INDEX(Remaining_Range,MATCH(FALSE,INDEX(Remaining_Range=””,),0))

This gives the next non-blank value in the **Remaining_Range**. Note the extract **INDEX(Remaining_Range=””,)** – this provides another array, this time of TRUE’s (where values are blank) and FALSE’s otherwise. **MATCH **simply returns the position of the first occurrence.

In our example (see Attached Excel Example Solution File):

### Finding the Next Value Actually Input

which leaves us with…

### The date of the next value actually input (b)

This is actually simply a modified version of the above formula using the INDEX MATCH INDEX formula with two ranges, viz.

=INDEX(Remaining_Range1,MATCH(FALSE,INDEX(Remaining_Range2=””,),0))

In our example (see Attached Excel Example Solution File):

### Finding the Next Date Where Data Was Actually Input

Voila!

### Suggested Solution

That’s it. We just need to put all of these formulae into the master computation

This leads to the following – deep breath! – horror formula in cell **F14 **of our Attached Excel Example Solution File:

=IFERROR(IF($H14<>"",$H14,

LOOKUP(2,1/($H$11:$H14<>""),$H$11:$H14)

+($F14-LOOKUP(2,1/($H$11:$H14<>""),$F$11:$F14))*

(INDEX($H15:$H$401,MATCH(FALSE,INDEX($H15:$H$401="",),0))-LOOKUP(2,1/($H$11:$H14<>""),$H$11:$H14))/

(INDEX($F15:$F$401,MATCH(FALSE,INDEX($H15:$H$401="",),0))-LOOKUP(2,1/($H$11:$H14<>""),$F$11:$F14))),"")

All I have added are two checks:

- Use the value input when it appears
- Make the cell blank if it gives rise to an error.

### Suggested Solution

Er, simple!

If you have more questions on the VLOOKUP or LOOKUP, you can find another thought article on it here, otherwise please feel free to drop Liam a line at liam.bastick@sumproduct.com