The Analysis ToolPak in Excel Sales Forecasting
The Analysis ToolPak in Excel sales forecasting figures out what's going on with your data without your having to enter formulas. Excel's Analysis ToolPak has three useful tools for directly forecasting — Moving Average, Exponential Smoothing, and Regression — along with others that can help. Here's a list of some tools that are part of the Analysis ToolPak:
| Tool |
What It Does |
| ANOVA |
There are actually three different ANOVA tools. None is
specifically useful for forecasting, but each of the tools can help
you understand the data set that underlies your forecast. The ANOVA
tools help you distinguish among samples — for example, do
people who live in Tennessee like a particular brand of car better
than those who live in Vermont? |
| Correlation |
This tool is an important one, regardless of the method you use
to do your forecast. If you have more than one variable, it can
tell you how strongly the two variables are related (plus or minus
1.0 is strong, 0.0 means no relationship). If you have only one
variable, it can tell you how strongly one time period is related
to another. |
| Descriptive Statistics |
Use the Descriptive Statistics tool to get a handle on things
like the average and the standard deviation of your data.
Understanding these basic statistics is important so you know
what's going on with your forecasts. |
| Exponential Smoothing |
I hate this tool's name — it sounds ominous and
intimidating, which the tool is not. When you have just one
variable — something such as sales revenue or unit sales
— you look to a previous actual value to predict the next one
(maybe the previous month, or the same month in the previous year).
All this tool does is adjust the next forecast by using the error
in the prior forecast. |
| Moving Average |
A moving average shows the average of results over time. The
first one might be the average for January, February, and March;
the second would then be the average for February, March, and
April; and so on. This method of forecasting tends to focus on the
signal (what's really going on in the baseline) and to
minimize the noise (random fluctuations in the
baseline). |
| Regression |
Regression is closely related to correlation. Use this tool to
forecast one variable (such as sales) from another (such as date or
advertising). It gives you a couple of numbers to use in an
equation, like Sales = 50000 + (10 * Date). |

Excel Glossary
active cell
The worksheet cell that contains the cell cursor. Each worksheet can have only one active cell.

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AutoComplete
A feature that looks at the entries that you make in a worksheet column and automatically duplicates them in subsequent rows whenever you start a new entry that begins with the same letter or letters as an existing entry in that column.

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AutoCorrect
A feature that alerts Excel 2007 to common typing errors and your own typing errors (that you specify) and tells the program how it should automatically fix them for you.

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AutoFill
An Excel 2007 feature that quickly creates a series of entries based on the data you enter in one or two cells. AutoFill works with days of the week, months of the year, yearly quarters; consecutive series of numbers; and formulas. You also can add your own custom AutoFill series.

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AutoFilter
A feature in Excel 2010 that enables you to temporarily hide everything in a table except the records you specifically want to view, based on criteria you specify.

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Backstage view
A new feature in Excel 2010 — accessible from the green File tab — that enables you to manage files and to view the properties and stats about the workbook file you're editing.

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cell
The intersection of a column and row in the worksheet.

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cell address
The cell identifier, determined by its column letter(s) followed by the row number, as in cell A1, the very first cell of each worksheet at the intersection of column A and row 1.

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cell cursor
The black border that surrounds the active cell in a worksheet.

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clip art
Readymade drawings, illustrations, and photos offered by Microsoft for use in Microsoft Office applications.

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Compatibility Checker
A utility in Excel 2007 and 2010 that you use to find potential compatibility issues if you plan to save an Excel workbook file in the older Excel 97–2003 file format.

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current cell
The worksheet cell that contains the cell cursor. Each worksheet can have only one current cell.

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data table
A range of cells in a worksheet in which you enter a series of possible values that Excel plugs into a formula so you can perform what-if analysis on the data.

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dialog box
A rectangular window with settings and commands that appears when you click a dialog box launcher or certain other commands on the Ribbon.

Excel Glossary
dialog box launcher
A small icon in the lower-right corner of a group of command buttons on the Ribbon that you click to access a dialog box with additional related settings and commands.

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function
A part of a formula that takes a number of specific arguments and then returns a single value based on those arguments.

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gallery
A drop-down list of thumbnail selections that appears when you click certain command buttons on the Ribbon.

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group
A section of a tab on the Excel 2007 Ribbon that organizes related command buttons into subtasks normally performed as part of the tab's larger core task. The name of a group appears at the bottom of the group, such as the Font group on the Home tab.

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hyperlink
Specially formatted text that anyone can click to jump to Web sites, move to other cells or workbooks, or create an e-mail message.

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keyboard shortcuts
A combination of keys that you can press to execute certain commands, as opposed to finding and clicking the commands' buttons on the Ribbon or elsewhere.

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Live Preview
A feature in Excel 2007 that enables you to point to thumbnails on a drop-down gallery to see how a new font, font size, table style, or cell style would look on your selected data before you actually apply it.

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macro
A series of commands or actions in Excel that are recorded and saved together in a file. You can run the macro whenever you need to perform the task.

Excel Glossary
Name box
The left-most section of the Formula bar that displays the address or name of the current cell.

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pivot table
A special type of table unique to Excel 2007 that enables you to summarize large amounts of data and pivot or rearrange the table's data to display different summaries of the information it contains.

Excel Glossary
Ribbon
A new feature of the Excel 2007 interface that replaces the menus and toolbars of previous versions; appears at the top of the Excel window, just below the title bar.

Excel Glossary
ScreenTip
A small window that displays descriptive text when you point to but don't click a command on the Ribbon or other objects in a worksheet.

Excel Glossary
sheet tabs
Small tabs near the bottom of a worksheet that you click to move between the worksheets in a workbook. You can assign descriptive names to sheet tabs.

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slicers
New graphic objects in Excel 2010 that enable you to quickly filter the contents of a PivotTable on more than one field.

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SmartArt
A type of graphic object in Excel 2007 that gives you the ability to quickly and easily construct graphical lists and diagrams in the worksheet.

Excel Glossary
sparklines
Tiny graphs (miniature charts) that fit within a single cell in the worksheet, used to show basic trends in data.

Excel Glossary
Status bar
A horizontal bar that appears at the bottom of the Excel 2007 window and keeps you informed of Excel's current mode. In addition, you can use the Status bar to select a new worksheet view and to zoom in and out on the worksheet.

Excel Glossary
tabs
The various "pages" of Excel 2007's Ribbon interface that you click to display command buttons relating to the tab's name, such as Page Layout and Formulas.

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template
A pre-designed worksheet that can be used as a basis for creating new worksheets.

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WordArt
Stylized text objects that you use to add pizzazz and emphasis to headings and other text in Excel 2007 worksheets.

Excel Glossary
workbook
The basic file type that you create when you use Excel 2007. A new workbook consists of three worksheets by default.

Excel Glossary
worksheet
The main document that you work in when you enter data into cells within Excel 2007. A worksheet is stored in a workbook file.

Excel Glossary
worksheet area
The portion of an Excel 2007 worksheet in which you enter cell data and add objects such as charts and graphics.

Excel Glossary
XPS XML Paper Specification
A file format developed by Microsoft that enables people to open and print documents in XPS Reader without access to the original programs with which the documents were created (such as Excel).

Excel Glossary
Zoom slider
An object on the Status bar in Excel 2007 that enables you to increase the magnification in a worksheet or shrink it down to get an overall picture of the worksheet data.