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Microsoft Excel
Microsoft Excel Worksheet Functions
Forecasting
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[QUOTE="joeu2004, post: 14091809"] This is very basic, but difficult to explain click-by-click if you are not savvy enough to figure this out for yourself. Also, the click-by- click instructions vary depending on the version of Excel, which you neglected to mention. My instructions are for XL2003. Suppose sales is in D2:D13 and gross profit is in G2:G13. Ideally, select both columns. One way: select D2:D13, then press and hold the Ctrl key while you select G2:G13. Now click the Chart Wizard icon on the toolbar. If it is not there, click View, then click Chart. In the first menu of the Chart Wizard, click the XY Scatter chart type. You can also click a chart subtype. Then click Finish. If the "curve" (imaginary or actual lines through the data) looks like it follows a pattern, you might want to also chart a trendline. Click the chart, point to the data points, right-click, and click Add Trendline. In the Type tab, select one of linear, logarithm, power or exponential, whichever you think might best fit the curve. I also like to select Display Equation and Display R-Squared in the Options tab. Then click OK. Do not expect the trendline to fit the data exactly. But you are looking for a large R-squared. It is quite possible (likely) that none of the standard trendlines fits the data well. All that means is: none of the standard forecasting methods work well with your data. On to Plan B ;-). By the way, resist the temptation to use a polynomial trendline, even if fits the data exactly. An n-order polynomial trendline should fit n +1 or fewer data points exactly. But it will usually be a poor predictor of past or future data points, unless you have some reason to believe your data has the kind of geometry. [/QUOTE]
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