Microsoft Excel What-If-Analysis

Needed: A worksheet to show Hyperlink.coms projected monthly revenue, expenses and net income for a six-month period. A 3D pie chart is also needed to show the contribution of each projected seven-month total net income. Save the worksheet as Hyperlink.com Start by preparing a worksheet similar to the one below:

To rotate the text for the months, do the following: - type the month e.g. July - right-click cell B3 then click the Format Cells on the shortcut menu - Click the Alignment tab - Click the 45 point in the Orientation area then click Ok - Select the fill handle on the lower-right edge of cell B3 - Drag the fill handle to the right to select the range C3:G3 then release the mouse button Use the Increase Indent button to indent the contents of A7:A12 (the contents will move three spaces to the right) Use the Copy and Paste command to copy the expense titles and paste them under the Assumptions heading. Right-click row heading 21 and insert a row. In the new cell A21, type Revenue for Bonus. Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series 1

(See the image below). In cell A13, type Total Expenses. In cell A14, type Net Income.

Enter the following information in cells B17:B23 as shown below. You should type in the percent symbol and the commas, as shown this will instruct Excel to format the cells using the Percent and comma styles.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

If you scroll all the way down or to the right, you will not be able to view the row or column titles. To alleviate this problem, we will next freeze the worksheet titles so that we can view the worksheet beyond the window. To freeze the column and row titles, do the following: - click cell B4 - click Window on the menu bar then click Freeze panes Enter the projected revenue in cells B4: G4 (without format symbols). In B4, enter 8754250; in cell C4, enter 4978200; in cell D4, enter 5250000; in cell E4, enter 7554875; in cell F4, enter 4768300; in cell G4, enter 6550700. Click cell H4, then click the Autosum button on the Standard toolbar twice. This will display the projected six month total revenue. The next step is to enter the formulas to calculate the projected monthly expenses in the range B7: G13 and the net incomes in row 14. The formulas are shown in the table below, however

BEFORE you start entering them, you need to be aware of the difference between absolute addressing and relative addressing.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

If the formula (=B17 * B4) entered for July in column B is copied to columns C through G, Excel will adjust the cell references for each column automatically. Hence, after the copy, the August administrative expense would be =C17 * C4, September would be =D17 * D4 etc. This is known as relative addressing. The formula for August should actually be =B17 * C4 and for September = B17 * D4. In other words, B17 should be constant for administrative expenses for columns C through G. To keep a cell reference constant when it copies a formula or function, Excel uses a technique called absolute addressing. This is done by placing a dollar sign ($) before the column letters and row numbers of the cell to be kept constant. So in our example above, we should specify B17 as $B$17. Therefore in cell B7, type =$B$17 * B4 for the Administrative formula, in cell B8, type =$B$18 * B4 for the Marketing formula etc. Making Decisions The If function If the projected July revenue in cell B4 is greater than or equal to the revenue for bonus in cell B21 (5,000,000) then the projected July bonus in cell B10 is equal to the amount in cell B20 (75,0000) otherwise, cell B10 is equal to 0. The Excel IF function is useful when the value you want to assign to a cell is dependent on a logical test. See the examples below.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

The general form of the IF function is: =IF(logical_test, value_if_true, value_if_false) In cell B10, type =IF(B4 >= $B$21, $B$20, 0) Enter the formulas for the remaining expenses, total expenses and net income. Copy the projected July expenses and net income formulas to the other months by selecting the range B7:B14, pointing to the fill handle and dragging the fill handle across the range C7:G14. Select the range H7:H14. Click the Autosum button on the Standard toolbar. Formatting the worksheet - Assign the Currency style with a floating dollar sign to rows 4, 7, 13, and 14 (use the format cells command) - Use the Comma style button on the Formatting toolbar to format rows 8 through 12 - Click cell A1. Select the Monotype Corsiva font. Change the font size to 26. - Click cell A2. Use the Bookman Old style font. Change the font size to 16. - Select the range A1:H2. Click the Fill Color button and select green. Click the Font Color button and select white. - With the range A1:H2 selected, click the Shadow button on the Drawing toolbar. Select Shadow style 14. - Click cell A4, hold down the CTRL key, then click cells A6, A13 and A14. Select 12 for the Font size. - Click cell A4, hold down the CTRL key, then click cell A6, then the range A14:H14. Click the Fill Color button and select Yellow. Click the Shadow button on the Drawing toolbar. Select Shadow style 14.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

Click cell A16. Use 16 for the font size. Click the Italic button then the Underline button. Select the range A16:B23. Click the Fill Color button and select Green. Click the Shadow button on the Drawing toolbar. Select Shadow style 14.

Your worksheet should look like this:

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

Adding a 3D Pie Chart on a Separate Sheet Select the range B3:G3. While holding down the CTRL key, select the range B14:G14. Click the Chart Wizard button on the Standard toolbar Select the 3D Pie chart (column 2, row 1) then click Next twice Type Projected Net Income in the Chart Title box then click the Legend tab. Click Show legend to remove the check box then click the Data Labels tab Click Show label and percent in the data labels area. Click Next. In the Chart Location dialog box, click As new sheet. Click Finish.

Formatting the Chart Title and Labels - Click the chart title. On the Formatting toolbar, click 36 for the font size, click the Underline button, then click Red for the Font color - Right-click one of the five data labels that identify the slices. On the Formatting toolbar, click 12 for the font size, click the Bold button, then click Red for the Font color - Save the worksheet What-If Analysis Using Excel to scrutinize the impact of changing values in cells that are referenced by a formula in another cell is called what-if analysis or sensitivity analysis. Excel will not only recalculate all formulas in the worksheet when new data is entered but also redraws any associated charts. When working with a large spreadsheet, you can split the window into two or four window panes to view different parts of the worksheet at the same time. In the worksheet, click cell D5. Click Window on the menu bar then click Split. Save the worksheet. Use the Vertical scroll bar to move the window so that cell A4 is in the upper-left corner of the screen. Drag the vertical split box from the lower-right corner of the screen to the left so that the vertical split bar is positioned in the middle of column F. Use the right scroll arrow to display the totals in column H in the right pane. Click cell B17.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

Enter 11.5 in cell B17. In cell B18, enter 8. In cell B20, enter 50000. Here we are changing the values of some of our assumptions to examine the impact on the projected six-month net income.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

Goal Seeking Close the worksheet without saving the changes. Open it again. If you know the result you want a formula to produce, you can use goal seeking to determine the value of a cell on which the formula depends. Here we want to determine what projected marketing percentage in cell B18 will yield a projected six month net income of $7,000,000 in cell H14, rather than $5,567,730.38.

Drag the vertical split box to the middle of column F. Scroll down so that row 4 is at the top of the screen. Display column H in the right pane. Click cell H14. Click Tools on the menu bar then click Goal Seek. Click the To value text box. Type 7,000,000 then click the By changing cell box. Click cell B18 on the worksheet. Click the Ok button. When the Goal Seek Status dialog box displays, click the OK button. Note that the marketing percentage in cell B18 decreases from 9.50% to 5.72%.

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

Source: Microsoft Office 2000 Introductory Concepts and Techniques, Shelly Cashman Series

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