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Managing scenarios

From: Excel for Mac 2011 Essential Training

Video: Managing scenarios

Most of the time you'll use Excel to summarize existing data. If you're a manager or a project leader who needs to account for possible future scenarios, what the Excel team refers to as 'what-if' analysis, you have one of two options: First, you can create a worksheet for every combination of variables. The other easier way is to perform what-if analysis by creating scenarios. So why would you want to create a scenario? Well, a scenario is used when there's more than one possible future, in other words if you wanted to get a loan from a bank, you might not know what the interest rate is.

Managing scenarios

Most of the time you'll use Excel to summarize existing data. If you're a manager or a project leader who needs to account for possible future scenarios, what the Excel team refers to as 'what-if' analysis, you have one of two options: First, you can create a worksheet for every combination of variables. The other easier way is to perform what-if analysis by creating scenarios. So why would you want to create a scenario? Well, a scenario is used when there's more than one possible future, in other words if you wanted to get a loan from a bank, you might not know what the interest rate is.

The interest rate would determine how much you can borrow, or at the very least your monthly payment, so you can build in scenarios, for example different loan amounts, different rates, different terms, and so on. So how do you create a scenario? Well, in Excel 2011, you go up to the Data tab on the Ribbon, and then in the Analysis group, click What-If, and then click Scenario Manager to display the Scenario Manager dialog box. This workbook already has two scenarios in it. I'll deal with those in a moment. But in this case what I want to do is create a scenario called long-term.

If you look back at the data in the worksheet, you'll see that I have a loan amount of 15 million, a term of 10 years, and an interest rate of 5.75%. Under those terms, the monthly payment would be $164,600. I like to bring that down, and one way that you can bring down your monthly payment is to pay the loan off over a longer period of time. You'll pay more interest, but again, the monthly payment will be lower. So, I'll create a scenario where I pay the loan off over a 25-year term. To create a new scenario, I will click Add, and I'll type in a scenario name.

I will call it LongTerm, and I'm going to change the value in cell B4. That's currently the 10-year payback. So I will just type in the reference for cell B4, and everything looks good. Click OK, and now I can type in the new value for the scenario. In this case, I want to try to pay it back over 25 years, and that's the only change I want to make, so I can click OK. If I wanted to create another scenario, I could click add.

I don't, so instead, I'll just click OK, and Excel created my scenario, but it didn't apply it yet. If I want to show that scenario, I can click LongTerm and then click the show button. When I do, Excel substitutes the value from the scenario into the worksheet, so now the term is 25 years, and my monthly payment is roughly half of what I was paying before. So once you apply a scenario, how do you get rid of it? Well, what you can do is click the close button to close the Scenario Manager dialog and then press Command+Z. There is no way to remove a scenario that's been applied from within the Scenario Manager dialog box, but you can do it once you come back here and press Command+Z, or click the Undo button on the toolbar. Okay.

So now let's go back in to the Scenario Manager and reapply the LongTerm scenario. You're not limited to applying scenarios one at a time. If I thought that there is a possibility I can get a lower interest rate on my loan, then I can apply the LowInterest scenario. To do that, I click LowInterest, click Show: the interest rate goes down to 5%, and my payment drops even lower. If you have two scenarios that affect the same cells, then the one that you apply later will be the one that is displayed within the worksheet.

So let's say, for example, that I thought that interest rates might be going up, and that I might have to deal with a high interest loan. If I want to apply that scenario, which will also affect cell B5, I can click Show. The interest rate goes up to 7%, which is a value I put into the scenario, and my payment goes up correspondingly. So now once you've created a scenario, let's suppose that you want to change it. You can do that by clicking the scenario you want to change. In this case, I'll change the LowInterest scenario, and click the Edit button.

When you do, you can change the scenario's name, change the cells that it applies to. In this case I want to do that, so I'll click OK, and I can now enter the value for each of the changing cells. For the low interest rate, let's say that I might be able to get a loan at 4.5%, and that is 0.045. That's my new value. Click OK, and now when I apply the LowInterest scenario by clicking Show, we get the rate of 4.5% and a payment of $83,000 and change.

If for any reason you want to get rid of this scenario, by deleting it, you can do that. So let's say that I want to delete the HighInterest scenario. I can click it and then click Delete. When I'm done with the Scenario Manager dialog box, I can click the close button, and it goes away. Scenarios help you manage your data when you need to account for several possible features, such as when you create the best, middle, or worst-case scenario. If you need to perform 'what-if' analysis, you'll find that scenarios will save you a lot of time and trouble.

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This video is part of

Image for Excel for Mac 2011 Essential Training
Excel for Mac 2011 Essential Training

100 video lessons · 33799 viewers

Curt Frye
Author

 
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  1. 1m 58s
    1. Welcome
      1m 16s
    2. Using the exercise files
      42s
  2. 20m 56s
    1. Exploring the Excel 2011 window
      4m 16s
    2. Introducing the Ribbon for Mac
      4m 44s
    3. Customizing the Ribbon
      4m 20s
    4. Setting program preferences
      3m 20s
    5. Getting help in Excel
      4m 16s
  3. 20m 4s
    1. Opening, creating, and saving workbooks
      5m 23s
    2. Setting workbook properties
      4m 14s
    3. Creating and modifying workbook templates
      4m 18s
    4. Managing workbooks across multiple versions of Excel
      6m 9s
  4. 1h 2m
    1. Selecting cells and groups of cells
      4m 58s
    2. Copying and pasting cell data
      2m 39s
    3. Entering data using AutoFill and other techniques
      4m 32s
    4. Inserting symbols and special characters
      5m 3s
    5. Creating an Excel table
      4m 43s
    6. Locating and changing data using Find and Replace
      4m 57s
    7. Restricting input using validation rules
      4m 42s
    8. Using lists to limit data entered into a cell
      2m 32s
    9. Sorting worksheet data
      3m 2s
    10. Creating a custom sort order
      3m 54s
    11. Filtering worksheet data
      4m 6s
    12. Inserting, moving, and deleting cells and cell ranges
      3m 50s
    13. Splitting and freezing rows and columns
      3m 51s
    14. Managing worksheets
      5m 28s
    15. Creating, editing, and deleting headers and footers
      4m 41s
  5. 1h 17m
    1. Introducing Excel formulas and functions
      3m 17s
    2. Adding a formula to a cell
      4m 0s
    3. Introducing arithmetic operators
      4m 13s
    4. Using absolute and relative cell references
      6m 29s
    5. Controlling how Excel copies and pastes formulas
      6m 5s
    6. Referring to Excel table data in formulas
      2m 3s
    7. Creating an AutoSum formula
      3m 22s
    8. Summarizing data on the status bar
      2m 22s
    9. Joining text in cells with concatenation
      3m 59s
    10. Summarizing data using an IF function
      6m 21s
    11. Summarizing data using SUMIF and other conditional functions
      5m 41s
    12. Creating formulas to count cells
      2m 37s
    13. Rounding cell values up and down
      4m 55s
    14. Finding data using VLOOKUP and HLOOKUP
      6m 33s
    15. Auditing formulas by identifying precedents and dependents
      3m 25s
    16. Managing Excel formula error indicators
      4m 42s
    17. Managing scenarios
      4m 59s
    18. Performing Goal Seek analysis
      2m 31s
  6. 45m 48s
    1. Applying fonts, background colors, and borders
      6m 7s
    2. Applying number and date formats to cells
      7m 1s
    3. Managing text alignment
      3m 56s
    4. Copying cell formats
      4m 2s
    5. Managing cell styles
      3m 16s
    6. Managing Office themes
      3m 31s
    7. Creating rule-based conditional formats
      3m 54s
    8. Defining Top 10 conditional formats
      4m 19s
    9. Defining data bar, color scale, and icon set conditional formats
      6m 6s
    10. Editing, ordering, and deleting conditional formats
      3m 36s
  7. 36m 55s
    1. Creating bar and column charts
      5m 26s
    2. Creating pie charts
      2m 32s
    3. Creating line charts
      4m 34s
    4. Creating XY (scatter) charts
      1m 49s
    5. Creating stock charts
      4m 11s
    6. Changing chart types and layouts
      2m 22s
    7. Changing the appearance of a chart
      4m 25s
    8. Managing chart axes and numbering
      2m 51s
    9. Adding trendlines to charts
      4m 14s
    10. Creating sparkline charts
      4m 31s
  8. 18m 39s
    1. Importing data from comma separated value (CSV) or text files
      4m 20s
    2. Connecting to an external data source
      2m 22s
    3. Using hyperlinks
      6m 1s
    4. Including an Excel workbook in another Office document
      3m 5s
    5. Linking to an Excel chart from another Office program
      2m 51s
  9. 26m 21s
    1. Creating and formatting shapes
      3m 10s
    2. Adding and adjusting images
      5m 38s
    3. Cropping, compressing, and removing image backgrounds
      4m 46s
    4. Creating SmartArt graphics
      5m 7s
    5. Creating WordArt
      2m 34s
    6. Aligning and layering objects
      5m 6s
  10. 29m 51s
    1. Introducing PivotTable reports
      3m 47s
    2. Creating a PivotTable report
      4m 37s
    3. Pivoting a PivotTable report
      3m 18s
    4. Managing subtotals and grand totals
      3m 23s
    5. Summarizing more than one data field
      1m 34s
    6. Changing the data field summary operation
      2m 40s
    7. Changing the data field number format
      2m 27s
    8. Filtering a PivotTable report
      2m 46s
    9. Applying a PivotTable style
      2m 20s
    10. Creating and editing styles
      2m 59s
  11. 26m 47s
    1. Checking spelling
      3m 32s
    2. Setting AutoCorrect and automatic Replace options
      3m 59s
    3. Managing workbook comments
      3m 40s
    4. Tracking and reviewing changes
      5m 12s
    5. Printing a worksheet or workbook
      3m 44s
    6. Setting and removing print areas
      2m 31s
    7. Exporting to other formats
      1m 33s
    8. Protecting a workbook
      2m 36s
  12. 23m 52s
    1. Running an existing macro
      4m 56s
    2. Recording a macro
      3m 56s
    3. Recording a macro using relative references
      6m 15s
    4. Renaming, viewing, and deleting macros
      2m 58s
    5. Adding comments to a macro
      2m 43s
    6. Turning off screen updating in a macro
      3m 4s
  13. 1m 1s
    1. Additional resources
      1m 1s

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