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Excel 2013 Bible by John Walkenbach

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Chapter 35: Performing Spreadsheet What-If Analysis

In This Chapter

Considering a what-if example

Identifying types of what-if analyses

Looking at manual what-if analyses

Creating one-input and two-input data tables

Using Scenario Manager

One of the most appealing aspects of Excel is its ability to create dynamic models. A dynamic model uses formulas that instantly recalculate when you change values in cells that are used by the formulas. When you change values in cells in a systematic manner and observe the effects on specific formula cells, you're performing a type of what-if analysis.

What-if analysis is the process of asking such questions as “What if the interest rate on the loan changes to 7.5% rather than 7.0%?” or “What if we raise our product prices by 5%?”

If you set up your worksheet properly, answering such questions is simply a matter of plugging in new values and observing the results of the recalculation. Excel provides useful tools to assist you in your what-if endeavors.

A What-If Example

Figure 35.1 shows a simple worksheet model that calculates information pertaining to a mortgage loan. The worksheet is divided into two sections: the input cells and the result cells (which contain formulas).

Figure 35.1

This simple worksheet model uses four input cells to produce the results.

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On the Web

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