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Bai 4 Practical

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26 views5 pages

Bai 4 Practical

Uploaded by

techieagarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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What-if Analysis in Excel

In Excel, What-if analysis is a process of changing cells' values to see how those
changes will affect the worksheet's outcome. You can use several different sets of
values to explore all the different results in one or more formulas.

What-if Excel is used by almost every data analyst and especially middle to higher
management professionals to make better, faster and more accurate decisions based
on data. What-if analysis is useful in many situations, such as:

o You can propose different budgets based on revenue.


o You can predict the future values based on the given historical values.
o If you expect a certain value due to a formula, you can find different sets of
input values that produce the desired result.

What-If Analysis in Excel allows you to try out different values (scenarios) for
formulas. The following example helps you master what-if analysis quickly and easily.

Assume you own a book store and have 100 books in storage. You sell a certain %
for the highest price of $50 and a certain % for the lower price of $20.

You can download the following workbook, Lab6WhatIF.xlsx, from the announcement
page.
If you sell 60% for the highest price, cell D10 calculates a total profit of 60 * $50 + 40
* $20 = $3800.

Create Different Scenarios


But what if you sell 70% for the highest price? And what if you sell 80% for the highest
price? Or 90%, or even 100%? Each different percentage is a different scenario. You
can use the Scenario Manager to create these scenarios.

Note: You can simply type in a different percentage into cell C4 to see the
corresponding result of a scenario in cell D10. However, what-if analysis enables you
to easily compare the results of different scenarios. Read on.

1. On the Data tab, click What-If Analysis and select Scenario Manager from the list.

The Scenario Manager dialog box appears.


2. Add a scenario by clicking on Add.

3. Type a name (60% highest), select cell C4 (% sold for the highest price) for the
Changing cells and click on OK.
4. Enter the corresponding value 0.6 and click on OK again.

5. Next, add 4 other scenarios (70%, 80%, 90% and 100%).

Finally, your Scenario Manager should be consistent with the picture below:
Note: to see the result of a scenario, select the scenario and click on the Show button.
Excel will change the value of cell C4 accordingly for you to see the corresponding
result on the sheet.
Scenario Summary

To easily compare the results of these scenarios, execute the following steps.
1. Click the Summary button in the Scenario Manager.
2. Next, select cell D10 (total profit) for the result cell and click on OK.

Result:

Conclusion: if you sell 70% for the highest price, you obtain a total profit of $4100, if
you sell 80% for the highest price, you obtain a total profit of $4400, etc. That's how
easy what-if analysis in Excel can be.

Goal Seek
What if you want to know how many books you need to sell for the highest price, to
obtain a total profit of exactly $4700? You can use Excel's Goal Seek feature to find
the answer.

1. On the Data tab, click What-If Analysis, Goal Seek.


The Goal Seek dialog box appears.
2. Select cell D10.
3. Click in the 'To value' box and type 4700.
4. Click in the 'By changing cell' box and select cell C4.
5. Click OK.

Result. You need to sell 90% of the books for the highest price to obtain a total profit
of exactly $4700.

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