MS excel what if analysis
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Transcript of MS excel what if analysis
EXCEL: EFFECTIVE DECISION MAKING TOOLS(What-If Analysis)
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What is WHAT-IF ANALYSIS?
It is the process of
changing the values in cells
to see how those changes
affect the outcome
of formulas on the worksheet.
In relation to this, you need
to create scenarios to
analyze.
What is a SCENARIO?
A scenario is a set of values
that Microsoft Excel saves
and can substitute
automatically in the
worksheet.
Why is SCENARIO important?
Because you can use
scenarios to forecast
the outcome of a worksheet
model.
Rationale
What can you do by using WHAT-IF SCENARIOS?
You can use several
different set of values in one
or
more formulas to explore
various results
HERE’s a very simple exercise
This example pertains to
BUDGET forecasting
But before we start creating
What-If Scenarios
we have to create a
formula for the budgets
highlight ALL cells and in the active cell up in
the corner,
then, write the formula
=B4 X Net Sales
lock it by hitting F4 twice
Take a look at this scenario
and we will learn how to create them
we defined the first scenario in the table above
that we used in the formula for
the first scenario
However, in the other scenario we will create
our own
Excel will use the same formula in
those scenarios
and populate the values for
us
To create multiple
scenarios
Go to “DATA RIBBON”
Click “WHAT-IF ANALYSIS”
Then, select “SCENARIO MANAGER”
A pop up will appear, click the “ADD”
button
It will then, ask you to provide
few inputs such as:
“SCENARIO NAME”
Write “Scenario 1”
Outline the cell range
and if required add comments
and click “OK”
Take NOTE!
Excel will automatically populate the
values by
clicking “OK” and then CLOSE
and your first scenario is
created
Remember the steps stated
above
Because we are going to create
different Budget
scenarios
Once again, go to “DATA RIBBON”
Click “WHAT-IF ANALYSIS”
Then, Click “SCENARIO MANAGER”
As you can see, the first
scenario you have created
has been populated by
Excel
Your First Scenario
Now, Let’s create the
second scenario
Click the “ADD” button
Click “ADD”
see the range we have
defined earlier?
This is the range we have provided earlier
Excel assumed that we are
going to use it again,
which is fine
Type SCENARIO 2
Click
“OK”
Provide scenario no. 2 and click “OK”
There are two (2) options in
Scenario 2
You have two option for this
1.Change the value here or
simply click “OK” and save it
2. You can now define values
and
click the “SAVE” button
You can create as many scenarios
as needed for you to analyze
your data
Customizing Axis Tool Bar
The quickest way to display
the values
for the created scenarios
is by customizing the axis tool
bar
this will allow you to select
scenario
and Excel will populate the
values for you
using the formula we
have defined earlier
Here are the steps to
customize the axis tool bar:
Step 1: GO TO FILE AND CLICK
LEFT CLICK
Step 2: SELECT
“OPTIONS”
Step 3: GO TO “QUICK ACCESS
TOOLBAR”
AND SELECT “ALL COMMANDS”
Step 4: FROM “ALL
COMMANDS”
GO TO “SCENARIO”
CLICK “ADD” BUTTON
AND THE SCENARIO ICON WILL APPEAR
ON YOUR DEFAULT LIST
Step 5: THIS “SCENARIO”
ICON SHOULD APPEAR
Thank You!