Explanation
What-If Analysis helps you understand how changing input values affects the final result.
It is useful for questions such as:
- What if the selling price increases?
- What if sales quantity decreases?
- What if expenses increase?
- What if the interest rate changes?
- What sales target is required to achieve a specific profit?
Excel provides three main What-If Analysis tools:
- Goal Seek
- Data Table
- Scenario Manager
Go to:
Data → What-If Analysis
Example
Suppose:
|
Item |
Value |
|
Quantity |
100 |
|
Selling Price |
₹500 |
|
Cost per Unit |
₹300 |
|
Total Cost |
₹30,000 |
|
Revenue |
₹50,000 |
|
Profit |
₹20,000 |
Now ask:
What if the selling price becomes ₹550?
What-If Analysis helps examine the resulting profit.
Practice
Create a simple sales model with Quantity, Price, Cost and Profit.