Valuing Businesses Using Regression Analysis

CHAPTER 10Using Excel's Regression Utility

One important consideration when preparing a valuation is that the data presented should be replicable. Appraisers hate black‐box numbers that appear out of nowhere, for which the reader cannot calculate. Consequently, if one decides to use the data and charts from the regression template in his or her own valuation report, one may wish to show more of the regression data that Excel generates.

This chapter will take the reader through all the steps necessary to employ Excel's regression utility. The first step is to “enable,” that is, to install the regression utility in one's computer. Regardless of whether Excel was pre‐installed on your computer or you downloaded the program from a CD or you use the online version, the regression utility is not pre‐installed. It is a fairly simple process, which only has to be done once on every computer in which you intend to use the regression utility.

INSTALLING EXCEL'S REGRESSION

The screen shots for the following steps are illustrated on the next page.

• Step #1—Boot up a blank worksheet in Excel. In the upper‐left corner you must click on “File” on the menu ribbon.

  

  EXHIBIT 10.1

  Source: Used with permission from Microsoft Corporation

• Step #2—The “Open” window will pop up. Click on “Options” at the bottom of the menu screen.

  EXHIBIT 10.2

  Source: Used with permission from Microsoft Corporation ...