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What If Analysis In Excel With Example Step By Step Tutorial

Bonisiwe Shabane
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what if analysis in excel with example step by step tutorial

What-If Analysis in Excel allows you to test various values (scenarios) within formulas. The following example will help you quickly grasp how to perform what-if analysis efficiently. Let’s say you manage a bookstore that has 100 books in stock. You sell a certain percentage at the highest price of $50 and the remaining at a lower price of $20. If 60% of the books are sold at the highest price, cell D10 calculates the total profit as: What if you sold 70% at the top price?

Or 80%, 90%, or even 100%? Each percentage represents a different scenario. You can use Scenario Manager in Excel to build and compare multiple scenarios. Note: You can manually change the percentage in cell C4 to view the impact on cell D10, but What-If Analysis provides a more structured approach to compare different scenarios side by side. 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. If you sell 60% for the highest price, cell D10 calculates a total profit of 60 * $50 + 40 * $20 = $3800. 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. Our first example is based on the house rent.

Using the scenario manager, you can find out which house is applicable for us. We would like to consider two scenarios The initial condition or dataset can consider as house 1. The scenario manager summary will give us the total cost of each house. Using this summary, you can select any possible house to stay in. To understand the example clearly, follow the steps.

Our next example is based on the scenario of the movie theatre. We will focus on the profit of movie theatres for different scenarios. Take a dataset that consists of the cost and revenue of a small movie theatre. We would like to use the scenario manager to get the final output for several scenarios. We would like to take two scenarios under consideration. To use a what-if analysis scenario manager for a movie theater example, follow the steps carefully.

Facebook Twitter LinkedIn WhatsApp Email Ask a question or join the conversation for all things Excel on our Slack channel. If you’ve ever experimented with different variables to see how your changes would affect the outcome of a situation, you’ve done a what-if analysis. Would you be able to sell more items if you had a sale this week? Or would you make more money by increasing the price instead? In the above scenarios, you want to know the degree to which each change affects the overall outcome.

For this reason, a what-if analysis is also known as a sensitivity analysis. Most what-if analyses are really mathematical calculations, and that is Excel’s specialty. To help you do a what-if analysis, Excel uses commands from the Forecast command group on the Data tab to prepare simple forecasts or advanced business models. Learn how to use a What-If Analysis in Excel to explore different scenarios by changing input values and observing the resulting effects on your models, enabling you to make more informed decisions. This powerful tool helps you understand the potential impacts of various factors without altering your original data. What-If Analysis is a crucial tool in Excel, allowing you to explore the impact of different assumptions on your spreadsheet models.

It’s like having a crystal ball that shows you potential outcomes based on changes you make to your data. This eliminates the need for tedious manual calculations and provides valuable insights for planning and decision-making. The benefits of using What-If Analysis are numerous and can significantly improve your business processes. Here are a few key advantages: Excel offers three primary What-If Analysis tools: Let’s explore each What-If Analysis tool with practical examples.

The What-If Analysis is a feature used to observe the different scenarios when one or more variables change resulting in a change in the overall outcome. It helps us build different scenarios, achieve goal seek numbers, and create data tables using variables. For instance, a printing shop prints approximately 1000 copies per day. Therefore, the estimated profit is calculated as $500. So, now we need to know what the profit will be using what-if scenarios such as what if the company prints 1500 copies, 2000 copies, and 2500 copies. By using What-If analysis, we can create scenarios for profit.

So, let us learn how to use what if analysis in Excel in detail. There are three types of what-if analysis in excel. They are: We need to choose any of the above three methods to perform a What-If analysis in excel. What if analysis in Excel allows you to explore different scenarios by tweaking input values in your data. It helps you make better decisions based on possible outcomes.

To do this, you can use tools like Scenario Manager, Goal Seek, and Data Tables. Let’s dive into how you can use these tools step-by-step. Here’s a guide to walk you through the process of performing a What If Analysis using Excel’s built-in tools. Open the Excel file where you want to perform the What If Analysis. Make sure your data is well-organized and easy to understand. This will make it simpler to play around with different scenarios.

Highlight the cells that contain the data you want to analyze. When planning or analyzing data in Excel, it’s crucial to understand how changes in your inputs can affect the outcome. Excel offers powerful what-if analysis tools like Scenario Manager, Goal Seek, and Data Tables that let you explore different possibilities without altering your original data. In this article, we will teach you each technique step by step so you can confidently model, forecast, and plan in Excel. To use what-if analysis with Goal Seek in Excel, follow the steps below: ➤ Go to the Data tab, click What-If Analysis, and choose Goal Seek.

➤ In the Goal Seek dialog box: For “Set cell“, select the cell that contains your target outcome, which is B10 (Net Profit). For “To value“, enter your desired net profit, which is 5000. For “By changing cell“, select the input cell that Goal Seek should adjust to reach your target. ➤ Press OK, and Excel will automatically change the input(cell B5) to reach your goal with net profit of $5,000(cell B10). What-if analysis in Excel lets you explore how changes in inputs affect your final results. Instead of manually changing different values, Excel offers built-in tools that automate the process and help you evaluate various scenarios.

There are three main types of what-if analysis: Scenario Manager: It lets you store and switch between multiple sets of input values to compare different outcomes. Goal Seek: This helps you find the exact input needed to reach a specific result. Data Tables: It allows you to test how one or two variables affect your results across a range of values. Published: December 18, 2024 - 3 min read Excel’s What-If Analysis tools help you explore different outcomes by varying key inputs in your calculations.

Whether you’re forecasting sales, planning budgets, or analyzing investment returns, these tools let you test multiple scenarios without manually changing your spreadsheet data. Let’s explore how to use Data Tables, Scenario Manager, and Goal Seek to make better-informed business decisions. Data Tables allow you to see how different input values affect your formulas’ results. You can create both one-variable and two-variable analyses. Example one-variable data table showing investment returns: Example two-variable data table showing investment returns with different time periods:

Curious how small changes can impact your Excel models? Discover how to use What-If Analysis tools—Scenario Manager, Goal Seek, and Data Tables—to explore possibilities and make smarter decisions. Have you ever wondered how a slight change in your budget, sales numbers, or interest rate might affect your final results? That’s precisely where What-If Analysis in Excel comes in. Whether you're planning a budget, forecasting sales, or making business decisions, What-If Analysis helps you explore different possibilities before committing to one. In this tutorial, we’ll walk through what defines What-If Analysis, and show you exactly which tools are used to perform What-If Analysis in Excel.

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What-If Analysis In Excel Allows You To Test Various Values

What-If Analysis in Excel allows you to test various values (scenarios) within formulas. The following example will help you quickly grasp how to perform what-if analysis efficiently. Let’s say you manage a bookstore that has 100 books in stock. You sell a certain percentage at the highest price of $50 and the remaining at a lower price of $20. If 60% of the books are sold at the highest price, ce...

Or 80%, 90%, Or Even 100%? Each Percentage Represents A

Or 80%, 90%, or even 100%? Each percentage represents a different scenario. You can use Scenario Manager in Excel to build and compare multiple scenarios. Note: You can manually change the percentage in cell C4 to view the impact on cell D10, but What-If Analysis provides a more structured approach to compare different scenarios side by side. What-If Analysis in Excel allows you to try out differe...

Assume You Own A Book Store And Have 100 Books

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. If you sell 60% for the highest price, cell D10 calculates a total profit of 60 * $50 + 40 * $20 = $3800. 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

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. Our first example is based on the house rent.

Using The Scenario Manager, You Can Find Out Which House

Using the scenario manager, you can find out which house is applicable for us. We would like to consider two scenarios The initial condition or dataset can consider as house 1. The scenario manager summary will give us the total cost of each house. Using this summary, you can select any possible house to stay in. To understand the example clearly, follow the steps.