What-If Analysis in Excel is a technique used to explore how changing the values in cells affects the outcomes of formulas in a worksheet. It helps users experiment with different scenarios to predict results and make informed decisions
Main Types of What-If Analysis Tools in Excel
- Goal Seek: Starts with a desired result and calculates the input value needed to achieve that result. For example, determining what grade you need on a final assignment to pass a class
- Scenario Manager: Allows you to create and save multiple sets of input values (scenarios) and switch between them to compare outcomes. Useful for comparing best-case, worst-case, and base-case scenarios
- Data Tables: Enables you to see how changing one or two variables affects the result of a formula by displaying multiple outcomes in a table format. This is helpful for sensitivity analysis and visualizing the impact of different inputs at a glance
Applications of What-If Analysis
- Budgeting and forecasting by testing different revenue or expense levels.
- Financial modeling to predict outcomes based on variable changes.
- Risk assessment and decision-making by evaluating multiple scenarios.
- Planning events or projects by adjusting key variables to meet constraints like budget or targets
Summary
What-If Analysis in Excel empowers users to test various input values and understand their impact on results using Goal Seek, Scenario Manager, and Data Tables. These tools support better decision-making by allowing visualization and comparison of different possible outcomes efficiently
