Practical Financial Modelling : A Guide to Current Practice

BODMAS

Brackets, order (power), division, multiplication, addition, and subtraction: the principle of arithmetic priority. One of the ideas promoted in this and the following chapters is to keep formulae short the longer the formula, the more chance we have of running into a Bodmas slip. You know the example: = 1+2*3 gives the result as 7. =(1+2)*3 is 9. Generally the use of brackets around each 'clause' is helpful, but in more complex formulae I often recommend breaking the formula into a number of smaller calculations. It may seem time-consuming and an insult to the intelligence, but I've seen too many megaformulae in my time which contain simple Bodmas errors.

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