1. What if analysis
By: Fatimah Alotaibi

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What-if analysis
Also defined as sensitivity analysis, what-if analysis is a
brainstorming technique used to determine how projected performance is affected by changes in the assumptions that those projections are based upon.
What if analysis is often used to compare different scenarios and their potential outcomes based on changing conditions.

3. The Benefits of What-if Analysis
fatimah alotaibi 2015
The Benefits of What-if Analysis
Not only can you make better and more informed decisions by changing assumptions and observing or estimating the results, you are also better able to predict the outcome of your decisions.

4. Three kinds of what if analysis tools with Excel:
fatimah alotaibi 2015
Three kinds of what if analysis tools with Excel:
Goal Seek .
Scenario Manager.
Data table.

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Goal seek
Goal seek uses a process of changing the values in cell to see how those changes affect the outcome of formulas on the worksheet.
The command use iteration in a controlled way to desired
results.
You can use Goal Seek when you know the desired result of a single formula but not the input value the formula needs to determine the result.

7. Consider this problem:
fatimah alotaibi 2015
Consider this problem:
Your business has a modest profit of 25,000 You've set yourself a new profit Goal of 35,000. At the moment, you're selling 1000 items at 25 each. Assume that you'll still sell 1000 items. The question is, to hit your new profit of 35,000, by how much do you have.

8. Create the spreadsheet below, and we'll find a solution with Goal
fatimah alotaibi 2015
Create the spreadsheet below, and we'll find a solution with Goal
Seek.
Profit = Item sold * Price per item

9. From the What if Analysis menu, select Goal Seek
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Click on Data.
From the What if Analysis menu, select Goal Seek
The "Set cell“ =where the formula is. The "To Value“= the new value.

10. Click OK to see if Excel can find an answer:
fatimah alotaibi 2015
Click OK to see if Excel can find an answer:

11. Make sure the Set cell Reference is to a cell that contains a
fatimah alotaibi 2015
Make sure the Set cell Reference is to a cell that contains a
formula, function , or cell reference.
Make sure the To value cell value is a reasonable value .
Make sure the By changing cell reference is a number or
blank, and not formula, function, or cell reference .
Make sure there is a link by formulas between the two cells you entered in Goal Seek .
However complicated link might be, they must be related for
the Set cell to be a function of the By changing cell.

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Scenario Manager
Use Scenario Manager to solve complex business solutions
when more than one factor can be used.

13. Scenario Manager Scenarios are useful when data is uncertain.
fatimah alotaibi 2015
Scenario Manager
Scenarios are useful when data is uncertain.
A scenario may contain up to 32 variables.
Use Scenario Manger to determine best case and worst case
scenarios.
Scenario Manager finds solutions to complex business problems.
Use named cells to help analyze results.

14. For example, What if I reduce the amount I'm spending on food?
fatimah alotaibi 2015
For example, What if I reduce the amount I'm spending on food?
How much will I have left then? Scenarios can be saved, so
that you can apply them with a quick click of the mouse.
An example of a scenario you might want to create is a family budget. You can then make changes to individual amounts, like food, clothes, or fuel, and see how these changes effect your overall budget.

15. Total outgoing =SUM(B8:B12). Income left= income- Total outgoing.
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Total outgoing =SUM(B8:B12).
Income left= income- Total outgoing.

16. Click on the What if Analysis item, and select
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Click on the What if Analysis item, and select
Scenario Manager from the menu:

17. But name for your Scenario in the Scenario Name box.
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But name for your Scenario
in the Scenario Name box.
Select the cells you want to
change in the in the Changing Cells box.
Click the Add button.

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19. Now that we have one scenario we can add a second one.
fatimah alotaibi 2015
Now that we have one scenario we can add a second one.
Click the Add button again. You'll get the Add Scenario
dialogue box .
Type a new Name, something like Budget Two.
The Changing Cells area should already say B7:B9. So just
click OK.

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Click the Show button at the bottom. The values in your spreadsheet will change, and the new budget will be calculated.

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22. How to Create a Report from a Scenario
fatimah alotaibi 2015
How to Create a Report from a Scenario
From the Scenario Manager dialogue box, click the Summary
button to see the following dialogue box:

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Data Tables
A data table automates data analysis and organizes the results when one or two variables change.
Takes sets of input values and determine possible results .

25. One-Variable Data Table
fatimah alotaibi 2015
One-Variable Data Table
A one-variable data table is used to evaluate financial information for decision making.

26. Total profit= (B8*C8)+(B9*C9)
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Create the worksheet:
Total profit= (B8*C8)+(B9*C9)

27. To create a one variable data table, execute the following steps:
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To create a one variable data table, execute the following steps:
Select cell B13 and type =C11 (refer to the total profit cell).
Type the different highest price in column A.
Select the range A13:B18.
We are going to calculate the total profit if you sell 60 for the
highest price, 70 for the highest price, etc.

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30. Two-Variable Data Table
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Two-Variable Data Table
Makes financial comparisons when two variables change.

31. To create a two variable data table, execute the following steps:
fatimah alotaibi 2015
To create a two variable data table, execute the following steps:
Select cell A13 and type =C11 (refer to the total profit cell).
Type the different unit profits (highest price) in row 13.
Type the different highest price in column A.
Select the range A13:D18.
We are going to calculate the total profit for the different combinations of 'unit profit (highest price)' .

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