Forecast Function in Excel
A useful function for business
FORECAST function in Excel is a statistical function that calculates, or predicts, a future value by using existing values. The predicted value is a y-value for a given x-value. The known values are existing x-values and y-values, and the new value is predicted by using linear regression. You can use this Excel function to predict future sales, inventory requirements, consumer trends or weight loss!. Syntax FORECAST(x, known_y’s, known_x’s) X is the data point for which you want to predict a value. Known_y’s is the dependent array or range of data. Known_x’s is the independent array or range of data. Remarks • If x is nonnumeric, FORECAST returns the #VALUE! error value. •If known_y’s and known_x’s are empty or contain a different number of data points, FORECAST returns the #N/A error value. •If the variance of known_x’s equals zero, then FORECAST returns the #DIV/0! error value.
The equation for FORECAST is a+bx, where:
and where x and y are the sample means AVERAGE(known_x’s) and AVERAGE(known y’s). The Excel training video demonstrates the concept.
Watch the video:
Description of the FORECAST function in Excel
Excel Sales Forecasting For Dummies