Beginner level · Module 5: Business Forecasting Basics · Lesson 2 of 3
Forecasting Tools in Excel
Use FORECAST.LINEAR and the Forecast Sheet to project sales forward.
In this lesson you will
- Forecast with FORECAST.LINEAR
- Create a Forecast Sheet with confidence bounds
Key concepts
FORECAST.LINEARForecast Sheetconfidence intervalseasonality setting
The lesson
FORECAST.LINEAR fits a straight-line trend to past values and projects it: =FORECAST.LINEAR(next_month, past_sales, past_months).
Data > Forecast Sheet creates a forecast chart and table with upper and lower confidence bounds, and can detect seasonality when there is enough history.
Check forecasts against reality by forecasting past months you already know and comparing.
Step by step
- Forecast next month with FORECAST.LINEAR.
- Create a Forecast Sheet.
- Back-test by forecasting a known month.
- Compare with the naive 'same as last month' forecast.
Practice activity
Forecast next month's sales for each branch with two methods and compare their past accuracy.
Expected result: Forecasts with a comparison of past accuracy.
Check your understanding
-
What does FORECAST.LINEAR assume?
Show answer
A straight-line trend continues.
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How can you check a forecasting method?
Show answer
Forecast past months you already know and compare.
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