10/17/2008 9152034.

xls

Projection & Regression in Excel

Excel offers a number of means to project future values and to perform
regression analysis:

Use of the Regression tool in the Analysis Toolpak add-in (TookPak)

Adding a trendline to a chart (Chart Trendline)
Completing values with the Series command (Series)
Projecting values with the FORECAST function (Functions)
Projecting values with the TREND or GROWTH functions (Functions)
Calculating a straight line or exponential curve from existing
data using the LINEST or LOGEST functions (Functions)
The Regression Tool in the ToolPak Add-In
Finding the Regression Tool
Part of Excel is an add-in named the "Analysis ToolPak".
When you choose the Tools menu, if you don't see the
option "Data Analysis…" in the list, you need to add in or
install and add in the Analysis ToolPak.

Starting the Regression Tool

When you choose Tools, Data Analysis from the menus,
a dialog like the one below displays:

Regression is one of the analysis tools in the Analysis

ToolPak.

Completing the Regression Dialog

Excel displays a "Regression" dialog that prompts for information
about your data and about what results you want to see.
Complete the dialog and click "OK".

A Small Example
quantity ads
27500 10
25000 7.5
25000 10
25000 5
27500 10
22500 7.5
25000 7.5
22500 5
27500 5
25000 5
27500 10
25000 5
22500 5
22500 5
Excel's Regression Output
The look of your results will depend on what output options
you selected in the dialog and on how much data you have.
You may need to widen columns in order to see the output
completely.
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.55
R Square 0.3
Adjusted R Square0.24
Standard Error 1.94
Observations 14

ANOVA
df SS MS F Significance F
Regression 1 19.53 19.53 5.19 0.04
Residual 12 45.2 3.77
Total 13 64.73

Coefficients
Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%
Intercept -8.66 6.88 -1.26 0.23 -23.65 6.33 -23.65
quantity 0 0 2.28 0.04 0 0 0

Notes
For the Y Range
Enter the reference for the range of dependent data.
The range must consist of a single column of data.

For the X Range

Enter the reference for the range of independent data.
Excel orders independent variables from this range in
ascending order from left to right. The maximum number
of independent variables is 16.

The data used in the regression must be contiguous in

the worksheet.
From Excel's menus select
Tools, Add-ins and toggle
on the checkmark to the
left of "Analysis ToolPak".
Upper 95.0%
6.33
0
Trendlines in Charts
You can extend a trendline in a chart beyond the
actual data to predict future values.

How To
To add a trendline to a data series in a chart:
1. Select the data series to which you want to add a trendline.
2. From the menus choose Chart, Add Trendline.
3. On the Type tab, click the type of regression trendline or
moving average you want.
4. On the Options tab, choose how many periods forward or
back you want to forecast.

If you select Polynomial, enter in the Order box the highest

power for the independent variable.
If you select Moving Average, enter in the Period box the number
of periods to be used to calculate the moving average.

A Small Example Chart of Actual Data

Quarterly Revenues Revenue in Millions
Q1 2 2.6
Q2 2.2 2.5
2.4
Q3 2.5
2.3
Q4 2.55 2.2
2.1
2
1.9
1.8
Q1 Q2 Q3 Q4

Chart w/4 Quarter Forecast

Revenue in Millions
2.6
2.5
2.4
2.3
2.2
2.1
2
1.9
1.8
Q1 Q2 Q3 Q4

The equation and R-squared value

are displayed on the chart.
Using the Series Command
Use the Edit, Fill, Series commands to project
future values and perform regression analysis.

A Linear Example
Initial Projected
1 1
2 2
3
4
5

A Growth Example
Initial Projected
1 1
3 1.5
2.25
3.38
5.06

How To
Select the initial data and as many rows
beneath it as you want forecast values.
Choose Edit, Fill, Series and complete the
"Series" dialog. Click OK.
Projection Functions

FORECAST

TREND

GROWTH

LINEST

LOGEST