11/4/2014

250026815.xls.ms_office

Projection & Regression in Excel

Excel offers a number of means to project future values and to perform
regression analysis:
Use of the Regression tool in the Analysis Toolpak add-in (TookPak)
Adding a trendline to a chart (Chart Trendline)
Completing values with the Series command (Series)
Projecting values with the FORECAST function (Functions)
Projecting values with the TREND or GROWTH functions (Functions)
Calculating a straight line or exponential curve from existing
data using the LINEST or LOGEST functions (Functions)

The Regression Tool in the ToolPak Add-In

Finding the Regression Tool
Part of Excel is an add-in named the "Analysis ToolPak".
When you choose the Tools menu, if you don't see the
option "Data Analysis" in the list, you need to add in or
install and add in the Analysis ToolPak.
Starting the Regression Tool
When you choose Tools, Data Analysis from the menus,
a dialog like the one below displays:

Regression is one of the analysis tools in the Analysis

ToolPak.
Completing the Regression Dialog
Excel displays a "Regression" dialog that prompts for information
about your data and about what results you want to see.
Complete the dialog and click "OK".
A Small Example
quantity
ads
27500
10
25000
7.5
25000
10
25000
5
27500
10
22500
7.5
25000
7.5
22500
5
27500
5
25000
5
27500
10
25000
5
22500
5
22500
5

Excel's Regression Output

The look of your results will depend on what output options
you selected in the dialog and on how much data you have.
You may need to widen columns in order to see the output
completely.
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.549294
R Square
0.301724
Adjusted R Square
0.243534
Standard Error
1.940809
Observations
14
ANOVA
df
Regression
Residual
Total

SS
MS
F
Significance F
1 19.53125 19.53125 5.185185 0.041897
12 45.20089 3.766741
13 64.73214

Coefficients
Standard Error t Stat
P-value Lower 95%Upper 95%Lower 95.0%
Intercept
-8.66071 6.881375 -1.25857
0.23212 -23.6539 6.332513 -23.6539
quantity
0.000625 0.000274
2.2771 0.041897
2.7E-05 0.001223
2.7E-05

Notes
For the Y Range
Enter the reference for the range of dependent data.
The range must consist of a single column of data.
For the X Range
Enter the reference for the range of independent data.
Excel orders independent variables from this range in
ascending order from left to right. The maximum number
of independent variables is 16.
The data used in the regression must be contiguous in
the worksheet.

From Excel's menus select

Tools, Add-ins and toggle
on the checkmark to the
left of "Analysis ToolPak".

Upper 95.0%
6.332513
0.001223

Trendlines in Charts
You can extend a trendline in a chart beyond the
actual data to predict future values.
How To
To add a trendline to a data series in a chart:
1. Select the data series to which you want to add a trendline.
2. From the menus choose Chart, Add Trendline.
3. On the Type tab, click the type of regression trendline or
moving average you want.
4. On the Options tab, choose how many periods forward or
back you want to forecast.
If you select Polynomial, enter in the Order box the highest
power for the independent variable.
If you select Moving Average, enter in the Period box the number
of periods to be used to calculate the moving average.
A Small Example
Quarterly Revenues
Q1
2
Q2
2.2
Q3
2.5
Q4
2.55

Chart of Actual Data

Revenue in Millions
2.6
2.4
2.2
2
1.8

Q1

Q2

Q3

Q4

Chart w/4 Quarter Forecast

Revenue in Millions
3.6
3.4
3.2
3
2.8
2.6
2.4
2.2
2
1.8

y = 0.195x + 1.825
R = 0.9418

Q1

Q2

Q3

Q4

Forecast for next 4 quarters

The equation and R-squared value

are displayed on the chart.

Using the Series Command

Use the Edit, Fill, Series commands to project
future values and perform regression analysis.

A Linear Example
Initial
1
2

A Growth Example
Initial
1
3

Projected
1
2
3
4
5

Projected
1
1.5
2.25
3.375
5.0625

How To
Select the initial data and as many rows
beneath it as you want forecast values.
Choose Edit, Fill, Series and complete the
"Series" dialog. Click OK.

Projection Functions
FORECAST

TREND

GROWTH

LINEST

LOGEST