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(Module 3 Continued) Data Analysis in Excel

The document discusses how to perform what-if analysis and sensitivity analysis in Microsoft Excel to evaluate the impact of changes to variables and assumptions. It provides examples of using the scenario manager and data table tools to model different scenarios by changing inputs like sales percentages and prices. The goal seek tool is also demonstrated to find the required value of a variable to achieve a target outcome like reaching a certain profit level.

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69 views

(Module 3 Continued) Data Analysis in Excel

The document discusses how to perform what-if analysis and sensitivity analysis in Microsoft Excel to evaluate the impact of changes to variables and assumptions. It provides examples of using the scenario manager and data table tools to model different scenarios by changing inputs like sales percentages and prices. The goal seek tool is also demonstrated to find the required value of a variable to achieve a target outcome like reaching a certain profit level.

Uploaded by

F2f General
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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INTRODUCTION TO

Microsoft EXCEL
COMPUTER APPLICATIONS IN MODERN INFORMATION SOCIETIES
DEPARTMENT OF SOCIO-COMPUTING
Module 3: Data Analysis
WHAT IF ANALYSIS
What If Analysis
✔ What-If Analysis in Excel allows you to
try out different values (scenarios) for
formulas.
✔ A Scenario is a set of values that Excel
saves and can substitute automatically
in cells on a worksheet.
✔ You can create and save different
groups of values on a worksheet and
then switch to any of these new
scenarios to view different results.
What If Analysis (CONT’D)
✔ The following example helps you
master what-if analysis quickly and
easily.

✔ Let's say you own a bookshop and have


150 books stored away. You sell a
specific percentage for the highest
price, 100 EGP, and a specific
percentage for the lowest price, 30 EGP.

✔ If you sell 60% for the highest price, cell


E9 calculates a total profit of (0.6*150 *
100) + (0.4*150 * 30) = 10800.
What If Analysis (CONT’D)
✔Now, let’s investigate different scenarios
✔What happens though if you sell 70% for the highest price? How would it be if you
sold 80% of it for the highest price? Or maybe 90%, maybe 100%? A distinct
situation applies to each different proportion. These situations can be investigated
using the Scenario Manager.

✔You can change the percentage in


cell D6 to view the outcome of a
scenario in cell E9 by doing so.
✔However, what-if analysis makes it
simple to contrast the outcomes of
several situations.
What If Analysis (CONT’D)
✔It is crucial to specify the value of
the percentage of books sold at
the lowest price before beginning
to investigate the various
scenarios to (1- percentage of
highest price).
✔As a result, the total profit will
continue to take into account
changes in the percentage of the
lowest price as well, and the total
percentages (highest and lowest)
will always remain 1.
What If Analysis (CONT’D)
✔Now, let’s investigate different scenarios at one step
1

4 3
What If Analysis (CONT’D)
8
5

6
9

Now, you can add as


Select the cell D6 many values as you
where you input the wish to explore their
7
value of the effects on the profit by
percentage sold for clicking the add button
the highest price and repeating the same
processes.
What If Analysis (CONT’D)
12

10
11 13

14
Module 3: Data Analysis
SENSITIVITY ANALYSIS
Sensitivity Analysis
Sensitivity analysis, in general, is an analytical tool that enables you to evaluate
how a dependent variable changes if one or more independent variables are
changed.

A two-way sensitivity analysis takes place when two input variables' values are
changed, as opposed to a one-way sensitivity analysis where only one input
variable's value is altered.
Sensitivity Analysis (CONT’D)
✔Assume you manage a chair store
with a known value of the total
number of sold chairs, as illustrated in
the screenshot.
✔To improve your sales strategy's
profitability, you should now assess
how the shop's profit is affected
concurrently by the price and volume
of sales.
✔Actually, your issue can be resolved
through the sensitivity analysis.
Sensitivity Analysis (CONT’D)
Example 1: One-way sensitivity analysis
✔Prepare the sensitivity analysis table as screenshot shown:
1. In Range E3:E8, please type the costs from 150 to 275.
2. In the Cell E2, please type the current cost/chair.
3. In the Cell F2, please type the formula = B12
Sensitivity Analysis (CONT’D)
✔Select the Range E2 : 2
F8 and Click Data >
3
What-If Analysis >
Data Table.

4
1
1
Sensitivity Analysis (CONT’D)
✔ In the popping out Data Table dialog
box:
1. Specify the cell with cost/chair in the
Column input cell box
2. Click the OK button.

✔ Now the sensitivity analysis table is


produced.
✔You can easily get how the net profit
changes when costs are changed.
Sensitivity Analysis (CONT’D)
Example 2: Two-way sensitivity
analysis
✔Prepare the sensitivity analysis
table as screenshot shown:
1. In Range F12:K12, please type the
sales volumes from 500 to 1750.
2. In Range E13:E18, please type the
prices from 250 to 375;
3. In the Cell E12, please type the
formula = B12
Sensitivity Analysis (CONT’D)
✔Select the Range E12 : 2
K18 and Click Data > 3
What-If Analysis > Data
Table.
4

1
Sensitivity Analysis (CONT’D)
✔In the popping out Data Table dialog box:
1. Specify the cell with chairs sales volume
in the Row input cell box (B2 in our case)
2. Specify the cell with chair price in the
Column input cell box (B3 in our case)
3. Click the OK button.

✔ Now the sensitivity analysis table is


produced.
✔You can easily get how the net profit
changes when both sales and price volume
change.
Sensitivity Analysis (CONT’D)
Goal Seek for Sensitivity Analysis in Excel – Example 1
✔Now suppose we want to find out how many units have to be sold to reach
$50,000 of net profit.
✔See the screenshot below and follow the steps listed to use the Goal Seek Excel
tool.

1. Select the cell with the net profit


formula
2. Set the new targeted value of the net profit.

3. Select the cell with the value of the current sold


items
Sensitivity Analysis (CONT’D)
✔ After the Goal Seek Status appears, Click on Ok.
✔The value of the sold items will be changed to the new value required to reach the
targeted net profit.
Sensitivity Analysis (CONT’D)
Goal Seek for Sensitivity Analysis in Excel – Example 2
✔Now suppose we want to find out the price required to reach $100,000 of net profit.
See the screenshot below and follow the steps listed to use the Goal Seek Excel tool.

1. Select the cell with the net profit


formula
2. Set the new targeted value of the net profit.

3. Select the cell with the value of the current sold


items
Sensitivity Analysis (CONT’D)
✔ After the Goal Seek Status appears, Click on Ok.
✔The value of the new price will be changed to the new value required to reach the
targeted net profit.

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