Forecast Sheet and Forecast.ETS

8/1/2020

Forecast Sheet

Excel’s Forecast Sheet feature not only creates forecasted values that account for seasonality, but it also can provide confidence boundaries around the forecasted values and create forecasted values for multiple future periods. Using the data shown below begin by clicking in the data you wish to use as the foundation for your forecast sheet. The data requires a time line with a consistent interval and corresponding values. Up to 30% of intervals can be missing and the Forecast Sheet will still be accurate.

Next, click Forecast Sheet on the Data tab of the Ribbon. In the ensuing dialog box (shown below), make any adjustments necessary for the time periods, confidence level, etc. and click Create to build the Forecast Sheet.

Clicking Create results in a new sheet being created to the left of the data sheet with a copy of the data, the results of the forecast, and a chart of the forecast. This is a copy of the data and any changes to the data will not be reflected in the forecast. To make any changes to your selections in the dialogue above you will have to edit the formulas in the forecast sheet or run the Forecast Sheet command again.

The FORECAST.ETS Function

The Forecast Sheet results above use the FORECAST.ETS as shown in the screen shot above. This function is an improvement over the FORECAST function which provided only linear forecasting capabilities. With FORECAST.ETS, you can now generate forecasts with exponential smoothing. The primary benefit to using the FORECAST.ETS function is that its exponential smoothing capacity allows you to create forecasts that account for seasonality in your data. To illustrate, consider the data below (with multiple rows hidden for presentation purposes). In it, a formula that uses the FORECAST.ETS function is computing forecasted sales for January 2021. Notably, because this formula employs the FORECAST.ETS function instead of the FORECAST function, it accounts for seasonality in the data.

forecast_sheet_and_forecast.ets.xlsx
File Size:	32 kb
File Type:	xlsx

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Ward Blatch

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Authors

Ward Blatch
Ward provides consulting and training services as the Managing Director of K2E Canada Inc. He joined K2E Canada in 2005 and is responsible for the Canadian operations of this international consulting group, which provides professional development technology education for accountants across Canada and the US. Ward lives in rural Nova Scotia and can be reached at ward@k2e.ca.

Tommy Stephens
Tommy is one of the shareholders in K2 Enterprises, affiliating with the Firm in 2003 and joining as a shareholder in 2017. At K2, Tommy focuses on creating and delivering content and is responsible for many of the Firm's management and marketing functions. Tommy resides in the metro Atlanta area. You may reach him at tommy@k2e.com.

Randy Johnson
Randy is a nationally recognized educator, consultant, and writer with over 40 years experience in Strategic Technology Planning, Accounting Software Selection, Paperless, Systems and Network Integration, Business Continuity and Disaster Recovery Planning, Business Development and Management, Process Engineering and outsourced managed services. Randy can be reached at randy@k2e.com

Bernie Smith
Bernie coaches businesses to develop meaningful KPIs and present their management information in the clearest possible way to support good decision making. As the owner of Made to Measure KPIs, he has worked with major organisations including HSBC, Airbus, UBS, Barclays, Credit Suisse, Lloyds and many more.

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