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MS Excel: Examples of what-if scenarios
article by Jed Jones
Microsoft Excel is a powerful piece of software, and most people underestimate the complexity and sophistication in the type of calculations that can handle it. A fine example of Excel power “foretell the future,” the ability is (Art!) By what-if scenarios.
What is a what-if scenario? One of the very useful things you can do in Excel, you can not simply with a piece of paper and a pencil (no matter how big the paper is or how big your pencil eraser) is making to create what would be- -if scenarios. These are the numerical models of the “things of the world” (such as investment models, scientific experiments, personal financial models, etc.) that are used to find out how things are changing in other circumstances (at different inputs) are. each what-if scenario consists of three types of elements:
a. Independent variable (s) (the “input” of the model).
b. Functions and formulas that affect your independent variables. c. . Dependent variables that change according to according to “a” and “b” (“output” of the model) It is these dependent variables that try to predict, they are what you want to know more information of the basic To build the model in the first place. With what-if scenarios, start by selecting a base model and then fine-tuned (configuration in different ways) by different combinations of independent variables (your input) and / or their functions and formulas. The goal is to “see what will happen” of course, your dependent variable (n)
Excel. Examples of what-if scenarios
Here are some common examples of what-if scenario applications:
1 Allocation of your monthly disposable income with your different types of debts (different credit cards, your mortgage, car loans, etc.) to determine is the combination of payments to any help you reduce your debt the fastest.
2 If you compare several car leasing deals, the various combinations of variables such as: amount of money payable monthly payment is signed, and leases, with the aim of determining the lead in one of the lowest total cost over the life of the lease. 3 Compare the total value of the multiple job offers, including independent variables such as earnest money, salary, benefits and value of the annual bonus. Using the Goal Seek MS Excel has built a very useful function called Goal Seek. This is a what-if scenario of sorts, but not necessary for you to create multiple versions of a model to see which version, in the desired output value. Rather, with Goal Seek, you just set up the model once and then say, Excel, which variable you are trying to achieve and what should be its value. They are also required for Excel, which of the independent variables are changed, you automatically to this value to predict
Here is what would indicate to perform a goal seek, what-if analysis.
1 First, create a model. This could be as simple as entering two variables in two cells, then create a formula in a third cell, which applies to the first two and a multiple of the values together. Or it could be much more complex. 2 Click the Data tab. In the Data Tools section, select the What-If Analysis icon, then Goal Seek from the drop-down menu. 3 In the Goal Seek dialog box “Set cell” field. Enter the coordinates of the cell (eg A4) of the cell that you are trying for you to achieve a specific level (eg 14). Tue 4th Enter to reaching the value you are trying, in the “To value” field. 5 Finally, give the coordinates in the cell, “By changing cell” field of the cell whose value you tell Excel to change in order to achieve the desired value in the first cell. Click OK. This is it! You’ll see that Excel has automatically named value, so that the desired value is reached in the other cell is changed. use Goal Seek is an under-function, but this is undeserved. If you learn how to use it, it can improve a great addition to your analytical toolbox. About the author If your Excel skills? Download your FREE copy of this cheat sheet in Excel. Www.Untangle-Your-Thoughts.com
article by Jed Jones
Microsoft Excel is a powerful piece of software, and most people underestimate the complexity and sophistication in the type of calculations that can handle it. A fine example of Excel power “foretell the future,” the ability is (Art!) By what-if scenarios.
What is a what-if scenario? One of the very useful things you can do in Excel, you can not simply with a piece of paper and a pencil (no matter how big the paper is or how big your pencil eraser) is making to create what would be- -if scenarios. These are the numerical models of the “things of the world” (such as investment models, scientific experiments, personal financial models, etc.) that are used to find out how things are changing in other circumstances (at different inputs) are. each what-if scenario consists of three types of elements:
a. Independent variable (s) (the “input” of the model).
b. Functions and formulas that affect your independent variables. c. . Dependent variables that change according to according to “a” and “b” (“output” of the model) It is these dependent variables that try to predict, they are what you want to know more information of the basic To build the model in the first place. With what-if scenarios, start by selecting a base model and then fine-tuned (configuration in different ways) by different combinations of independent variables (your input) and / or their functions and formulas. The goal is to “see what will happen” of course, your dependent variable (n)
Excel. Examples of what-if scenarios
Here are some common examples of what-if scenario applications:
1 Allocation of your monthly disposable income with your different types of debts (different credit cards, your mortgage, car loans, etc.) to determine is the combination of payments to any help you reduce your debt the fastest.
2 If you compare several car leasing deals, the various combinations of variables such as: amount of money payable monthly payment is signed, and leases, with the aim of determining the lead in one of the lowest total cost over the life of the lease. 3 Compare the total value of the multiple job offers, including independent variables such as earnest money, salary, benefits and value of the annual bonus. Using the Goal Seek MS Excel has built a very useful function called Goal Seek. This is a what-if scenario of sorts, but not necessary for you to create multiple versions of a model to see which version, in the desired output value. Rather, with Goal Seek, you just set up the model once and then say, Excel, which variable you are trying to achieve and what should be its value. They are also required for Excel, which of the independent variables are changed, you automatically to this value to predict
Here is what would indicate to perform a goal seek, what-if analysis.
1 First, create a model. This could be as simple as entering two variables in two cells, then create a formula in a third cell, which applies to the first two and a multiple of the values together. Or it could be much more complex. 2 Click the Data tab. In the Data Tools section, select the What-If Analysis icon, then Goal Seek from the drop-down menu. 3 In the Goal Seek dialog box “Set cell” field. Enter the coordinates of the cell (eg A4) of the cell that you are trying for you to achieve a specific level (eg 14). Tue 4th Enter to reaching the value you are trying, in the “To value” field. 5 Finally, give the coordinates in the cell, “By changing cell” field of the cell whose value you tell Excel to change in order to achieve the desired value in the first cell. Click OK. This is it! You’ll see that Excel has automatically named value, so that the desired value is reached in the other cell is changed. use Goal Seek is an under-function, but this is undeserved. If you learn how to use it, it can improve a great addition to your analytical toolbox. About the author If your Excel skills? Download your FREE copy of this cheat sheet in Excel. Www.Untangle-Your-Thoughts.com
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