Define what the meaning of what-if analysis in Excel as it relates to a speadsheets use?

Answer 1

What-if analysis is the process of changing the values in cells to see how those changes will affect the outcome of formulas on the worksheet.

Three kinds of what-if analysis tools come with Excel: scenarios, data tables, and Goal Seek. Scenarios and data tables take sets of input values and determine possible results. A data table works only with one or two variables, but it can accept many different values for those variables. A scenario can have multiple variables, but it can accommodate only up to 32 values. Goal Seek works differently from scenarios and data tables in that it takes a result and determines possible input values that produce that result.

In addition to these three tools, you can install add-ins that help you perform what-if analysis, such as the Solver add-in. The Solver add-in is similar to Goal Seek, but it can accommodate more variables. You can also create forecasts by using the fill handle and various commands that are built into Excel. For more advanced models, you can use the Analysis Pack add-in.

Answer 2

What-if analysis allows you to do various comparisons of different situations using a spreadsheet. It allows you to analyse what is the effect of changing values. It is literally as it says "What If I do this?"

So for example you could have some products and see what the effect is of changing the price, or changing the amount of supplies you get, or changing the amount of staff you are using. Will you make more money by getting staff that must be paid higher wages but can produce more goods, or staff that are cheaper but don't produce as much? These things can be tested by entering in the values to be used in the formulas and calculate the profits. Companies can then make decisions based on these kinds of analysis.

Excel and other spreadsheet packages provide different ways to do these things. There is the IF function. There is the Input Tables facility. There is the Scenarios facility. By using these and other facilities in a spreadsheet you can do What-If Analysis.

Answer 3

By changing values in a spreadsheet it is possible to see what the effect of those changes are. So in relation to what can happen you can see "what if " these values are entered. This allows people to analyse the effect of those changes, so you have what is called "What if analysis".