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Five. Advanced Data Analysis > 21. Scenarios and Goal Seeking

Chapter 21. Scenarios and Goal Seeking

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 are:

  • Missing data. Excel formulas require exact values—there’s no room for guessing or estimates.

  • Multiple possibilities. An Excel formula can give you only 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 happen in order for you to get the desired result. For example, you may 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.


  

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