How to Speed Up Slow Excel Spreadsheets

You know the feeling. You’re on a deadline, the Managing Director is waiting for the updated IRR sensitivity analysis, and you make one small change to a rent assumption.

Then, you wait.

The cursor spins. The screen fades to a ghostly white. "(Not Responding)" appears in the title bar. For 30 agonizing seconds, you are held hostage by your own financial model.

In high-stakes environments like Real Estate Private Equity (REPE) or Investment Banking, the "Spinning Wheel of Death" isn’t just an annoyance—it’s an operational risk. It breaks your flow, delays decision-making, and increases the likelihood of errors as you frantically try to save your work.

Most advice on speeding up Excel focuses on superficial fixes like "deleting rows." But if you are building institutional-grade models, speed isn't just about file size; it’s about calculation architecture. A slow model is almost always a poorly architected model.

This guide will turn you from a frustrated user into a Performance Architect, showing you how to diagnose the root causes of lag and engineer efficiency back into your spreadsheets.

Why Is My Excel File So Slow? (Root Cause Analysis)

Before we start deleting things, we need to understand why the engine is struggling. Excel slowness generally falls into two buckets: Bloat and Calculation Density.

File Bloat vs. Calculation Density

• File Bloat: This affects how long it takes to open and save the file. It’s caused by "ghost" data, unused formatting, and heavy objects (images, logos). It creates large file sizes (e.g., 50MB+) but doesn’t always impact calculation speed.
• Calculation Density: This affects how long it takes to process a change. You could have a tiny 2MB file that freezes for 10 seconds every time you type a number. This is caused by inefficient formula chains, volatile functions, and circular logic.

The "Spaghetti Code" Problem

Legacy models often suffer from what developers call "spaghetti code." Over years of deal cycles, analysts copy-paste tabs, patch formulas, and link to external workbooks. This creates a tangled dependency tree that Excel’s calculation engine has to map out every single time you press Enter. The more tangled the web, the harder the engine has to work.

Phase 1: Immediate "File Hygiene" Fixes (The Quick Wins)

If you have a heavy model, start here. These steps reduce file size and clear memory, giving Excel’s engine more room to breathe.

1. Switch to Binary Workbook (.xlsb)

By default, Excel saves files as .xlsx (XML format). This is great for compatibility but inefficient for performance.

• The Fix: Save your model as an Excel Binary Workbook (.xlsb).
• The Benefit: Files are often 30-50% smaller, and they load and save significantly faster. The only downside is slightly reduced compatibility with third-party tools (like Power BI), but for core modeling, it is the gold standard.

2. Eliminate "Ghost" Cells

Sometimes Excel thinks your data extends to row 1,048,576 because you once accidentally formatted a whole column.

• The Test: Press Ctrl + End.
• The Diagnosis: If the cursor jumps to cell XFD1048576 (or anywhere far below your actual data), you have "ghost" cells. Excel is allocating memory for millions of empty cells.
• The Fix: Highlight all rows below your data and all columns to the right of your data. Right-click > Delete. Then, immediately Save the file to reset the "Used Range."

3. Clear Unused Formatting

Conditional formatting is computationally expensive because Excel must check the condition for every painted cell.

• The Fix: Avoid selecting entire columns (e.g., A:A) for conditional formatting. Apply it only to the specific data range (e.g., A1:A500). Use Home > Conditional Formatting > Manage Rules to find and delete duplicated or fragmented rules.

Phase 2: Structural Repair (The Performance Architect)

Now we tackle the calculation lag. This requires re-thinking how your formulas are built.

1. Kill the Volatile Functions

Volatile functions are the silent killers of performance. A standard formula only recalculates when its input data changes. A volatile function recalculates every time anything in the entire workbook changes.

• The Offenders: OFFSET, INDIRECT, TODAY, NOW, RAND.
• The Fix:
  • Replace OFFSET with INDEX. INDEX is non-volatile and significantly faster.
  • Don’t use TODAY() inside 1,000 date-check formulas. Put =TODAY() in one cell (e.g., on a 'Inputs' tab) and reference that single cell everywhere else.

2. Optimize Lookup Formulas

If your model relies on thousands of VLOOKUPs, you are bottlenecking the CPU.

• The Fix:
  • Upgrade: Use XLOOKUP or INDEX/MATCH, which are generally more efficient and flexible.
  • The "Double VLOOKUP" Trick: If you are looking up data in a massive sorted table (100k+ rows), exact match VLOOKUP is slow. Using two approximate match VLOOKUPs is exponentially faster, though it requires advanced setup.
  • Limit Range: Never reference an entire column (A:A). Reference the specific Table or range (A1:A5000).

3. Break Up Mega-Formulas

We’ve all seen them: the "Monster Formula" that takes up five lines of the formula bar, filled with nested IF statements.

• The Problem: These are hard for Excel to parse and impossible for humans to audit.
• The Fix: Use Helper Columns. It might seem counterintuitive that adding more columns makes a file faster, but breaking a complex calculation into 5 simple steps allows Excel’s multi-threaded calculation engine to process them more efficiently than one massive logic knot.

Phase 3: App & Hardware Configuration

Sometimes the bottleneck isn't the car; it's the road.

1. 64-bit vs. 32-bit Excel

This is the single biggest hardware upgrade you can make.

• The Reality: 32-bit Excel is capped at using 2GB of RAM, no matter how powerful your computer is. If you have a 32GB RAM laptop but run 32-bit Excel, you are wasting 94% of your power.
• The Fix: Uninstall Office and reinstall the 64-bit version. This allows Excel to utilize virtually all available system RAM.

2. Manual Calculation Mode

If you are building a massive sensitivity table or running a Monte Carlo simulation, you don't need live updates for every keystroke.

• The Fix: Go to Formulas > Calculation Options and select Manual.
• The Workflow: Make your input changes freely, and then press F9 when you are ready to see the result. Just remember to switch it back to Automatic before sharing the file!

The Long-Term Solution: Automated Model Architecture

You can spend hours optimizing a legacy spreadsheet, but the moment a junior analyst pastes a new data set or adds a quick INDIRECT formula, the rot sets in again.

The ultimate speed limit of a model is determined by its architecture—the "skeleton" of the file.

How Apers Writes "Clean Code"

This is where AI changes the game. Instead of inheriting a 10-year-old "Frankenstein" model, tools like Apers allow you to generate fresh, institutional-grade models from scratch in seconds.

Apers acts as a Performance Architect:

• It builds formula chains that flow logically from Inputs to Calculations to Outputs.
• It avoids volatile functions and circular references by default.
• It formats efficiently, applying styles only where data exists.

By using AI to handle the "heavy lifting" of model construction, you ensure that your financial infrastructure is optimized for speed from Day 1.

Conclusion

Speed is a discipline. It requires constant vigilance against bloat and a commitment to clean formula architecture. By implementing these hygiene habits—or better yet, using AI to enforce them—you can stop watching the spinning wheel and start analyzing the deal.

See also:

• Excel Keeps Crashing? Here's Why and How to Fix It
• Why Manual Data Entry Is Costing You Deals

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