Excel Sales Forecasting For Dummies Cheat Sheet - For Dummies.pdf

Excel Sales Forecasting For Dummies Cheat Sheet - For Dummies

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http://www.dummies.com/how-to/content/excel-sales-forecasting-for-...

The Analysis ToolPak in Excel Sales Forecasting The Analysis ToolPak in Excel sales forecasting figures out what's going on with your data without your having to enter formulas. Excel's Analysis ToolPak has three useful tools for directly forecasting — Moving Average, Exponential Smoothing, and Regression — along with others that can help. Here's a list of some tools that are part of the Analysis ToolPak: Tool

What It Does

ANOVA

There are actually three different ANOVA tools. None is specifically useful for forecasting, but each of the tools can help you understand the data set that underlies your forecast. The ANOVA tools help you distinguish among samples — for example, do people who live in Tennessee like a particular brand of car better than those who live in Vermont?

Correlation

This tool is an important one, regardless of the method you use to do your forecast. If you have more than one variable, it can tell you how strongly the two variables are related (plus or minus 1.0 is strong, 0.0 means no relationship). If you have only one variable, it can tell you how strongly one time period is related to another.

Descriptive Statistics

Use the Descriptive Statistics tool to get a handle on things like the average and the standard deviation of your data. Understanding these basic statistics is important so you know what's going on with your forecasts.

Exponential Smoothing

I hate this tool's name — it sounds ominous and intimidating, which the tool is not. When you have just one variable — something such as sales revenue or unit sales — you look to a previous actual value to predict the next one (maybe the previous month, or the same month in the previous year). All this tool does is adjust the next forecast by using the error in the prior forecast.

Moving Average

A moving average shows the average of results over time. The first one might be the average for January, February, and March; the second would then be the average for February, March, and April; and so on. This method of forecasting tends to focus on the signal (what's really going on in the baseline) and to minimize the noise (random fluctuations in the baseline).

Regression

Regression is closely related to correlation. Use this tool to forecast one variable (such as sales) from another (such as date or advertising). It gives you a couple of numbers to use in an equation, like Sales = 50000 + (10 * Date).

Excel Sales Forecasting Functions Give these sales forecasting functions in Excel a good baseline and you can get a handle on future sales business. Some Excel forecast functions and

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Excel Sales Forecasting For Dummies Cheat Sheet - For Dummies http://www.dummies.com/how-to/content/excel-sales-forecasting-for-... get a handle on future sales business. Some Excel forecast functions and their actions appear in the following chart — keep it handy:

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Function

What It Does

CORREL

The worksheet version of the Analysis ToolPak's Correlation tool. The difference is that CORREL recalculates when the input data changes, and the Correlation tool doesn't. Example: =CORREL(A1:A50, B1:B50). Also, CORREL gives you only one correlation, but the Correlation tool can give you a whole matrix of correlations.

LINEST

You can use this function instead of the Analysis ToolPak's Regression tool. (The function's name is an abbreviation of linear estimate.) For simple regression, select a range of two columns and five rows. You need to array-enter this function. Type, for example, =LINEST(A1:A50, B1:B50,,TRUE) and then press Ctrl+Shift+Enter.

TREND

This function is handy because it gives you forecast values directly, whereas LINEST gives you an equation that you have to use to get the forecast. For example, use =TREND(A1:A50,B1:B50,B51) where you're forecasting a new value on the basis of what's in B51.

FORECAST

The FORECAST function is similar to the TREND function. The syntax is a little different. For example, use =FORECAST(B51,A1:A50,B1:B50) where you're forecasting a new value on the basis of the value in B51. Also, FORECAST handles only one predictor, but TREND can handle multiple predictors.

9/17/2013 5:44 PM