What if Analysis — Microsoft Excel
In this article, we will walk you through the core concept of, what if analysis is and we will describe the real meaning of that in accounting and finance and we also understanding how helpful it is and how we can use it.
Let’s Dive In
What if Analysis
What-If Analysis is the process of changing the values in cells to see how those
changes will affect the outcome of formulas on the worksheet. By using What If Analysis tools in Excel, we can use several different sets of values in one or more formulas to explore the various results.
Excel has three types of What if Analysis features:
- Goal Seek
- Scenario Manager
- Data Table
Goal Seek
Goal Seek is the most common What if Analysis tool in MS Excel. It is a problem solving approach that involves identifying and obtaining the desired outcome or solutionby changing an assumption that drives it. If we know the result we want from a formula, we can use Goal Seek in Excel.
B7 calculates the sum of all subjects’ marks. The marks for Social Study are the input in cell B6. In this example, we are considering Total Marks as 440.
Now, the Goal Seek is required to know the result of sum(B2:B6) in cell B7. After this, we will get the Marks of Social Study in B6.
- On the Data tab, in the Forecast group, click on What-If Analysis and then on Goal Seek.
- The Goal Seek dialog box appears.
- Select cell B7. Click in the 'To value' box and type 440.
- Click in the ‘By changing cell’ box and select cell B6.
- Click on OK.
We will have our desired result of 91. We can use Goal Seek for most formulas in Excel.
Conclusion
We finally learning the fundamentals of what if analysis using microsoft excel and along with that we also cover how we can use this functions in accounting and finance, that help us to reach excellent results.
