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EXCEL: EFFECTIVE
DECISION MAKING
TOOLS
(What-If Analysis)
www.virtualcha.com
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
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!

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MS Excel: What If Analysis