How Spreadsheets Can Be Used To Solve Complex Problems- P1
Spreadsheet models give the user a large amount of tools and functions which can be used
to solve a number of problems, such as cash flow forecasting, budget control, sales
forecasting, payroll projections, statistical analysis and trend analysis.
Supporting Decision Making
Spreadsheet software offers functions that can be used to support decision making,
providing timely and accurate information in a variety of situations.
Analysis of data: This is more easily achieved when data is summarised in some way or is
presented graphically. This is especially true for large amounts of data when it is necessary
to rely on representative values as there is too much data to spot a trend among thousands
of individual data results.
Goal seeking: If you know the result that you want from a formula, but are not sure what
input value the formula needs to get that result, using the “Goal Seek” feature does the job
for you.
Scenarios: If you create and save different groups of values as scenarios on a worksheet,
you will then be able to switch between these scenarios to view the different results.
Regression: This is a form of statistical analysis used for forecasting. It is time consuming to
perform manually but easier if you use a spreadsheet to do all the calculations for you.
Data mining tools: These help the user to derive patterns and trends that exist in complex
data. For example, all credit card transactions are stored by the various credit card agencies
and the data is analysed to spot possible fraudulent activity.
Cash Flow Forecasting
If you have sufficient information about how things have worked out in the past, and you
have the tools to process this data. You can take measurements today and, if you have a
formula that you think will work, you can calculate the values for tomorrow, the day after and
so on. Then, as time passes, you can check the accuracy of your forecasts and amend your
model - the formulae that you used - until they more accurately forecast the future. A
spreadsheet is particularly useful for forecasting because it will do all the calculations for
you. Each new row (or column) can be used to represent the next day (or whatever time
interval you choose for your model).
Accounts departments need cash flow forecasting data so that they can chase payments to
avoid problems, and they may use this data to forestall outgoing payments if they know there
is not enough money to honour a payment.
Budget Control
Spending can't just happen; there ought to be plans made so that the expected revenue for
Spreadsheet models give the user a large amount of tools and functions which can be used
to solve a number of problems, such as cash flow forecasting, budget control, sales
forecasting, payroll projections, statistical analysis and trend analysis.
Supporting Decision Making
Spreadsheet software offers functions that can be used to support decision making,
providing timely and accurate information in a variety of situations.
Analysis of data: This is more easily achieved when data is summarised in some way or is
presented graphically. This is especially true for large amounts of data when it is necessary
to rely on representative values as there is too much data to spot a trend among thousands
of individual data results.
Goal seeking: If you know the result that you want from a formula, but are not sure what
input value the formula needs to get that result, using the “Goal Seek” feature does the job
for you.
Scenarios: If you create and save different groups of values as scenarios on a worksheet,
you will then be able to switch between these scenarios to view the different results.
Regression: This is a form of statistical analysis used for forecasting. It is time consuming to
perform manually but easier if you use a spreadsheet to do all the calculations for you.
Data mining tools: These help the user to derive patterns and trends that exist in complex
data. For example, all credit card transactions are stored by the various credit card agencies
and the data is analysed to spot possible fraudulent activity.
Cash Flow Forecasting
If you have sufficient information about how things have worked out in the past, and you
have the tools to process this data. You can take measurements today and, if you have a
formula that you think will work, you can calculate the values for tomorrow, the day after and
so on. Then, as time passes, you can check the accuracy of your forecasts and amend your
model - the formulae that you used - until they more accurately forecast the future. A
spreadsheet is particularly useful for forecasting because it will do all the calculations for
you. Each new row (or column) can be used to represent the next day (or whatever time
interval you choose for your model).
Accounts departments need cash flow forecasting data so that they can chase payments to
avoid problems, and they may use this data to forestall outgoing payments if they know there
is not enough money to honour a payment.
Budget Control
Spending can't just happen; there ought to be plans made so that the expected revenue for
