Excel formulas are perfect when you need to analyze information from the past, like sales figures, census data, and experimental observations. But life becomes more complicated when you need to plan for the future. Some of the problems you can face include:
Missing data. Excel formulas require exact values—there’s no room for guessing or estimates.
Multiple possibilities. An Excel formula can only give you a single answer. If you need to make projections that take best-case and worst-case scenarios into consideration, you have to create multiple versions of the same worksheet.
Calculating backward. Often, when creating plans or projections, you need to reverse engineer your information. In other words, you need to start with the conclusions and work backward to find out what conditions need to occur in order for you to get the desired result. For example, you might ask what score you need on a final exam to get a certain grade in a class, or what interest rate you need to make a profit of $500.
To help you tackle these challenges, Excel includes a few specialized tools that you’ll learn about in this chapter. First, you’ll see how you can use Excel scenarios to consider multiple possibilities within the same worksheet. Next, you’ll learn about Excel’s goal-seeking tool, which provides a simple approach for calculating backward and filling in a missing value. Finally, you’ll take a look at one of Excel’s most sophisticated add-ins—Solver, which ...