TREND analysis

Wally's Electronics Warehouse is a large physical and online retail outlet for
electronic and household products. They have computerised point-of-sale,
purchasing, accounting, customer relationship (CRM) and ecommerce
systems.
Recently, you have been concerned about customer spending patterns and
their affect on revenue and profits. You believe new consumer trends are
emerging that will affect future profitability in this and the stores they are
planning to open. Information provided in internal reports seems to
support your belief. However, you need more than generalised suspicions
if you want your concerns to be taken seriously by the management group.
Using historical data, forecast figures for large appliances for Wallys
Electronic Warehouse for next year using Microsoft Excel.
Step 1: Open a new worksheet in Excel and enter the information
provided below.
Year
2010
2011
2012
2013
2014
2015

% of total
sales
19%
18%
16%
15%
13%

Step 2: Click on the empty cell to the right of the year 2015 in Table 1
where you want the forecasted answer to appear.
Step 3: Click on the FORECAST function located in the Formulas tab. The
location of this function within the tab may vary depending on which
version of Excel you are using (2003, 2007, 2010 or 2013). Try the
Statistical menu located in the More Functions icon.
Step 4: Enter the information required in the pop up window.
X is the value you are calculating. In this case you are looking for data for
2015 so click on the cell labelled 2015 (not the one you are placing the
formula in). This cell must contain a number. An error message (#VALUE!)
will appear if the cell contains text or other data.
Known Y's is the data you are using to calculate the forecast figure. This
is the % sales figures from 2010 to 2014. Click and drag your mouse over
the cells containing the % sales data from 2010 to 2014 so the cell range
appears in the Known Y's box. These cells must contain numbers. An error
message (#DIV/0!) will appear if any cells contain text or other data.
Known X's is the interval periods the data has been collected over. The
number of cells selected for this range must be the same as for Known Y's.
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In this example, the Known X's is the years 2010 to 2014. Click and drag
your mouse over the cells containing the year titles so the cell range
appears in the Known Xs box.
Once you have entered the variables, click Enter.

Note: If the result appears as the number 0.117, change the cell formatting
to percentage so it's displayed as 12%.

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Step 5: Convert the data into a line graph to see if the trend identified
earlier continues into 2015.

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Need help creating the graph? Visit this website for a brief tutorial:
Excel Easy, Line Chart, viewed January 2016, <http://www.excel-

easy.com/examples/line-chart.html>.

Large appliances % of total sales

20%
% of total sales

15%
10%
2008

2010

2012

2014

2016

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