Scenario manager is a what-if analysis tool available in Excel that works on different scenarios. It uses a group of ranges that impact an individual output. Therefore, we can use it to make different scenarios, such as bad and medium, depending on the values present in the range that affect the result.
What is a Scenario Manager in Excel?
- Scenario manager in Excel is a part of three what-if-analysis tools in Excel, which are built-in in Excel. In simple terms, you can see the impact of changing input values without changing the actual data. Like a Data Table in excelData Table In ExcelA data table in excel is a type of what-if analysis tool that allows you to compare variables and see how they impact the result and overall data. It can be found under the data tab in the what-if analysis section., you now input values that must change to achieve a specific goal.
- Scenario manager in Excel allows you to change or substitute input values for multiple cells (maximum up to 32). Therefore, you can view the results of different input values or different scenarios at the same time.
- For example: What if I cut down my monthly traveling expenses? How much will I save? Here, we can store scenarios to apply them with a mouse click.
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How to Use Scenario Manager Analysis Tool in Excel?
Scenario manager is very simple and easy to use in Excel. Let us understand the working of the scenario manager tool in Excel with some examples.
Scenario Manager in Excel – Example #1
A simple example could be your monthly family budget. You will spend on food, travel, entertainment, clothes, etc., and see how these affect your overall budget.
Step 1: Create a below table that shows your list of expenses and income sources.
- In cell B5,you have total income.
- In cell B17,you have total expenses for the month.
- In cell B19,total money left.
You are ending up with only 5,550 after all the expenses. So, it would help if you cut your cost to save more for the future.
Step 2: From the top of Excel, click the Data menu > On the “Data” menu, locate the “Data Tools” panel > Click on the “What-If-Analysis” item and select the “Scenario Manager” in Excel from the menu.
Step 3: When you click on the Scenario Manager below, the dialog box will open.
Step 4: You need to create a new scenario. So, click on the Add button. Then, you will get the below dialog box.
By default, it shows cell C10, which means it is the currently active cell. So, first, type the scenario name in the box as the Actual Budget.
Now, you need to enter which cells your excel sheet will be changing. Nothing will change in this first scenario because this is my actual budget for the month. Still, we need to specify the cells that will be changing.
Now, try to reduce the food expenses and clothes expenses. These are in cells B15 and B13,respectively. Now, the add scenario dialog box should look like this.
Click “OK.” Excel will ask you for some values. Since we do not want any changes to this scenario, click “OK.”
Now, you will be taken back to the scenario manager box. Now, the window will look like this.
Now, one scenario is done and dusted. Next, create a second scenario where you must change your food and clothes expenses.
Click the Add button and give a “Scenario Name” as “Plan 2”. “Changing the cell” will be B15 and B13 (food and cloth expenses).
Now, below, the “Scenario Values” dialog box opens again. This time, we want to change the values. Enter the same ones as in the image below:
These are the new values for our new scenario, Plan 2. Click “OK.” Now, you are back to the Scenario Manager window. Now, we have two scenarios named after Actual Budget and Plan 2.
Click the Add button and give a scenario name as “Plan 3.” “Changing cells” will be B15 and B13 (food and cloth expenses).
Now, below, the “Scenario Values” dialog box opens again. This time, we do want to change the values. Insert the same ones as in the image below:
These are the new values for our new scenario, Plan 3. Click “OK.” Now you are back to the “Scenario Manager” window. Now, you have three scenarios named after Actual Budget, Plan 2, and Plan 3.
As you can see, we have our “Actual Budget,” “Plan 2,” and “Plan 3.” With “Plan 2” selected, click the “Show” button at the bottom. The values in your Excel sheet will change, and we will calculate the new budget. The image below shows what it looks like.
Click on the Actual Budget and the Show button to see the differences. It will display initial values.
Do the same for “Plan 2” to look at the changes.
So, scenario manager in Excel allows you to set different values and identify the significant changes.
How to Create a Summary Report in Excel?
After adding different scenarios, we can create a summary report in Excel from this scenario manager. To create a summary report in Excel, follow the below steps.
- Click on the Data tab from the Excel menu bar.
- Click on What-If-Analysis.
- Under the what-if-analysis, click Scenario Manager in Excel.
- Now, click on Summary.
- Click “OK” to create the summary report in Excel.
- It will create the summary in the new sheet, as shown in the below image.
- It shows the change in savings in three different scenarios. In the first scenario, the savings was 5,550. In the second scenario, savings are increased to 20,550 due to cost cut down in Food & Clothes section, and finally, the third scenario shows the other scenario.
- All right, now we exercised a simple Family Budget Planner. It looks good enough to understand. Perhaps, this is enough to convince your family to change their lifestyle.
- Scenario manager in Excel is a great tool when you need to do sensitivity analysisSensitivity AnalysisSensitivity analysis is a type of analysis that is based on what-if analysis, which examines how independent factors influence the dependent aspect and predicts the outcome when an analysis is performed under certain conditions.. You can instantly create the summary report in Excel to compare one plan with the other and decide the best alternative plan to get a better outcome.
Scenario Manager in Excel Example #2: Take the below data and create new scenarios.
Take the below data table and create new scenarios.
- “If the Operating Cost Reduces by 10%.”
- “If the Operating Cost Reduces by 15%.”
- “If the Unit PriceUnit PriceUnit Price is a measurement used for indicating the price of particular goods or services to be exchanged with customers or consumers for money. It includes fixed costs, variable costs, overheads, direct labour, and a profit margin for the organization. increases by five and all others remain the same.”
The formula used in cell B4 is =B2*B3 & in cell B11 is = B4 – B9.
In addition, your scenarios will look like the one below.
This article has been a guide to what is the Scenario Manager in Excel. Here, we walk through examples of scenario managers in Excel and create a summary report along with downloadable Excel templates. You may also look at these useful functions in Excel: –
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