Excel Scenarios

Scenarios come under the heading of "What-If Analysis" in Excel. They are similar to tables in that you are changing values to get new results. For example, What if I reduce the amount I'm spending on food? How much will I have left then? Scenarios can be saved, so that you can apply them with a quick click of the mouse.

An example of a scenario you might want to create is a family budget. You can then make changes to individual amounts, like food, clothes, or fuel, and see how these changes effect your overall budget.

We'll see how they work now, as we tackle a family budget. So, create the spreadsheet below:

A Family Budget Spreadsheet in Excel 2007

The figure in B12 above is just a SUM function, and is your total debts (=SUM(B3:B10). The figure in D3 is how much you have to spend each month (not a lot!). The figure in D13 is how much you have left after you deduct all your debts. In cell D13, then, enter =D3 - B12

With only 46 pounds spending money left each month, clearly some changes have to be made. We'll create a scenario to see what effect the various budgets cuts have.

  • From the top of Excel click the Data menu
  • On the Data menu, locate the Data Tools panel (Forecast panel in Excel 2016)
  • Click on the What if Analysis item, and select Scenario Manager from the menu:

The Data Tools panel in Excel 2007

When you click Scenario Manager, you should the following dialogue box:

The Scenario Manager dialogue box

We want to create a new scenario. So click the Add button. You'll then get another dialogue box popping up:

Add an Excel Scenario

The J22 in the image is just whatever cell you had selected when you brought up the dialogue boxes. We'll change this. First, type a Name for your Scenario in the Scenario Name box. Call it Original Budget.

Excel now needs you to enter which cells in your spreadsheet will be changing. In this first scenario, nothing will be changing (because it's our original). But we still need to specify which cells will be changing. Let's try to reduce the Food bill, the Clothes Bill, and the Phone bill. These are in cells B7 to B9 in our spreadsheet. So in the Changing Cells box, enter B7:B9

Don't forget to include the colon in the middle! But your Add Scenario box should look like this:

A Scenario added

Click OK and Excel will ask you for some values:

Excel Scenario Values

We don't want any values to change in this first scenario, so just click OK. You will be taken back to the Scenario Manager box. It should now look like this:

First Scenario set up

Now that we have one scenario set up, we can add a second one. This is where we'll enter some new values - our savings.

Click the Add button again. You'll get the Add Scenario dialogue box back up. Type a new Name, something like Budget Two. The Changing Cells area should already say B7:B9. So just click OK.

You will be taken to the Scenario Values dialogue box again. This time, we do want to change the values. Enter the same ones as in the image below:

New values added for the scenario

These are the new values for our Budget. Click OK and you'll be taken back to the Scenario Manager. This time, you'll have two scenarios to view:

Two scenarios added

As you can see, we have our Original Budget, and Budget Two. With Budget Two selected, click the Show button at the bottom. The values in your spreadsheet will change, and the new budget will be calculated. The image below shows what it looks like in the spreadsheet:

Excel Scenario Manager with two scenarios set up

Click on the Original Budget to highlight it. Then click the Show button. The first values will be displayed!

Click the Close button on the dialogue box when you're done.

So a Scenario offers you different ways to view a set of figures, and allows you to switch between them quite easily.

How to Create a Report from a Scenario

Another thing you can do with a scenario is create a report. To create a report from your scenarios, do the following:

  • Click on Data from the Excel menu bar
  • Locate the Data Tools panel (Forecast panel in Excel 2016)
  • On the Data Tools panel, click What if Analysis
  • From the What if Analysis menu, click Scenario Manager
  • From the Scenario Manager dialogue box, click the Summary button to see the following dialogue box:

Scenario Summary in Excel

What you're doing here is selecting cells to go in your report. To change the cells, click on your spreadsheet. Click individual cells by holding down the CTRL key on your keyboard, and clicking a cell with your left mouse button. Select the cells D3, B12 and D13. If you want to get rid of a highlighted cell, just click inside it again with the CTRL key held down. Click OK when you've selected the cells. Excel will then create your Scenario Summary:

A Scenario Summary in report format

All right, it's not terribly easy to read, but it looks pretty enough. Perhaps it will be enough to convince our family to change their ways. Unlikely, but a nice diagram never hurts!

We'll now move on to Goal Seek.

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