Handling Large Datasets in Excel and Python
Financial analysis often involves working with large datasets. Traditional tools like Excel can
struggle with massive amounts of data, making Python a powerful alternative. This article
explores techniques for handling large datasets in both Excel and Python.
Excel Techniques
Excel remains a popular tool for financial analysis, but it requires efficient techniques to
handle large datasets without slowing down performance.
1. Pivot Tables
Pivot tables summarise and analyse large datasets quickly.
Example: If you have a dataset with daily stock prices, a pivot table can summarise average
monthly prices.
Steps to Create a Pivot Table:
1. Select your dataset.
2. Go to Insert → Pivot Table.
3. Drag fields to the Rows and Values sections.
2. Power Query
Power Query is an Excel feature that allows users to clean, transform, and automate data
imports.
Benefits:
✔ Automates data cleaning.
✔ Handles large datasets without slowing down Excel.
✔ Can connect to external databases.
Example: Import and clean financial data from a CSV file.
3. Solver for Financial Modelling - New
Solver helps in optimisation problems such as portfolio allocation.
Example: Minimising Risk in a Portfolio
● Objective: Minimise risk.
● Constraints: Maintain a certain return level.
To use Solver:
1. Go to Data → Solver.
2. Define the objective cell and constraints.
3. Click Solve.
Python Techniques
Python is a powerful tool for handling large datasets efficiently.
1. pandas for Data Manipulation
Pandas is widely used for managing financial data.
import pandas as pd
df = pd.read_csv("financial_data.csv")
df.describe()
2. dask for Big Data Processing
Dask is used when datasets are too large for pandas.
import dask.dataframe as dd
df = dd.read_csv("large_financial_data.csv")
df.compute()
3. numpy for Numerical Computations
Numpy optimises numerical operations, making calculations faster.
import numpy as np
returns = np.random.randn(1000000) # Generate 1 million random stock returns
print(np.mean(returns))
Why This Matters
✔ ️Large datasets can slow down Excel but are efficiently handled with Python.
✔ Automation in Python reduces manual errors.
✔ Financial analysis requires both Excel and Python for different use cases.
Conclusion
Efficient handling of large datasets is crucial for financial analysis. While Excel is useful for
basic operations, Python provides superior capabilities for managing and analysing massive
datasets. Future modules will explore in-depth financial modelling techniques.
