The document discusses how to use what-if analysis and scenarios in Excel to forecast outcomes under different assumptions. It provides steps to create scenarios by changing cell values, then use the Scenario Manager to save scenarios and automatically populate values. Customizing the toolbar with the Scenario icon allows quickly selecting scenarios to view results. The document demonstrates creating two budget scenarios as a simple example of exploring various results.

1. EXCEL: EFFECTIVE
DECISION MAKING
TOOLS
(What-If Analysis)
www.virtualcha.com

2. What is WHAT-IF
ANALYSIS?

3. It is the process of
changing the
values in cells

4. to see how those
changes affect the
outcome

5. of formulas on the
worksheet.

6. In relation to this,
you need to create
scenarios to
analyze.

7. What is a
SCENARIO?

8. A scenario is a set
of values that
Microsoft Excel
saves

9. and can substitute
automatically in
the worksheet.

10. Why is
SCENARIO
important?

11. Because you can
use scenarios to
forecast

12. the outcome of a
worksheet model.

13. Rationale

14. What can you do by
using WHAT-IF
SCENARIOS?

15. You can use
several different
set of values in
one or

16. more formulas to
explore various
results

17. HERE’s a very
simple exercise

18. This example
pertains to
BUDGET
forecasting

19. But before we
start creating
What-If Scenarios

20. we have to create
a formula for the
budgets

21. highlight ALL cells
and in the active
cell up in the
corner,

22. then, write the
formula

23. =B4 X Net Sales

24. lock it by hitting
F4 twice

26. Take a look at this
scenario

28. and we will learn
how to create
them

29. we defined the
first scenario in
the table above

30. that we used in the
formula for the
first scenario

31. However, in the
other scenario we
will create our
own

32. Excel will use the
same formula in
those scenarios

33. and populate the
values for us

34. To create multiple
scenarios

35. Go to “DATA
RIBBON”

36. Click “WHAT-IF
ANALYSIS”

37. Then, select
“SCENARIO
MANAGER”

39. A pop up will
appear, click the
“ADD” button

41. It will then, ask
you to provide few
inputs such as:

42. “SCENARIO
NAME”

43. Write “Scenario 1”

44. Outline the cell
range

45. and if required add
comments

46. and click “OK”

48. Take NOTE!

49. Excel will
automatically
populate the
values by

50. clicking “OK” and
then CLOSE

51. and your first
scenario is
created

53. Remember the
steps stated above

54. Because we are
going to create

55. different Budget
scenarios

56. Once again, go to
“DATA RIBBON”

57. Click “WHAT-IF
ANALYSIS”

58. Then, Click
“SCENARIO
MANAGER”

60. As you can see,
the first scenario
you have created

61. has been
populated by
Excel

62. Your First
Scenario

63. Now, Let’s create
the second
scenario

64. Click the “ADD”
button

65. Click
“ADD”

66. see the range we
have defined
earlier?

67. This is the range we have
provided earlier

68. Excel assumed
that we are going
to use it again,

69. which is fine

70. Type SCENARIO 2

71. Provide scenario
no. 2 and click
“OK”

72. There are two (2)
options in
Scenario 2

73. You have two
option for this

74. 1. Change the
value here or

75. simply click “OK”
and save it

76. 2. You can now
define values
and

77. click the “SAVE”
button

79. You can create as
many scenarios

80. as needed for you
to analyze your
data

81. Customizing Axis
Tool Bar

82. The quickest way
to display the
values

83. for the created
scenarios

84. is by customizing
the axis tool bar

85. this will allow you
to select scenario

86. and Excel will
populate the
values for you

87. using the formula
we have defined
earlier

89. Here are the steps
to customize the
axis tool bar:

90. Step 1: GO TO FILE
AND CLICK LEFT
CLICK

91. Step 2:
SELECT
“OPTIONS
”

92. Step 3: GO TO
“QUICK ACCESS
TOOLBAR”

93. AND SELECT “ALL
COMMANDS”

95. Step 4: FROM
“ALL
COMMANDS”

96. GO TO
“SCENARIO”

97. CLICK “ADD”
BUTTON

98. AND THE
SCENARIO ICON
WILL APPEAR ON
YOUR DEFAULT
LIST

100. Step 5: THIS
“SCENARIO”
ICON SHOULD
APPEAR

102. Thank You!