MODELING USING MICROSOFT EXCEL

Modelling using Microsoft Excel

Modelling using Microsoft Excel

Introduction

Microsoft Excel is a spreadsheet program that is used to store, sort and efficiently crunch numbers. Accountants use Excel to keep track of transactions for their company. Students might use Excel to help draw conclusions from the data they gathered on a science project. No matter what you are using Excel for it is important that you have the basic knowledge required to do the everyday operations you will encounter while using this program.

In years past, every well-run corporation undoubtedly had a written business plan. Oftentimes, these plans were considered by many to be an exercise in frustration, as they were laboriously considered, written and then stored on the company's library shelf until the next business planning cycle. The last few decades have seen a radical change in the way companies do their planning. More often than not, the "old" business plan - though still produced and of value in its own right - is given less attention than the newer Strategic Plan. Unlike the Business Plan, which tends to be a very short document, the Strategic Plan is likely to be much more substantial and detailed. The Business Plan provides the foundation and framework for the Strategic Plan.

Senior business managers are often so occupied with immediate issues that they can easily lose site of the long-term objectives of the business - objectives upon which the business can thrive if attained or fail completely if not. Because of this, a Strategic Plan today is a virtual necessity. Most managers tend to see the Strategic Plan as a 'living' document; one that, with careful foresight, consideration and development is written at the start of a business planning period, then reworked as circumstances within the company and business climate change throughout the planning period (Kevin, 2002).

The writing and preparation of a Strategic Plan is an important effort, demonstrating that careful consideration has been given to the business's development; however, the ultimate goal of the Strategic Plan is its own realization. With the advent of the personal computer and spreadsheet development, the Strategic Planning process today is made easier with the many current spreadsheet programs available to aid in the Plan'

The term "spread sheet" (nowadays "spreadsheet) has a long history, beginning with the non-computerized version, a reference to which was made in accounting books from the early 1950's to describe a worksheet providing a two-way analysis of accounting data (i.e. an accounting matrix in which the columns and rows constitute either debit and credit sides).

As the forerunners of today's spreadsheet programs for PC's such as Lotus 1-2-3, Microsoft Excel, etc., these spread sheets contained use of matrices, (budget) simulation, and, most important, the calculation to support each matrix cell." Although Mattessich's work was mentioned in economic and computer literature as well as accounting literature, computerized spreadsheets only became popular in the 1980's after the introduction (Oliver, 2001).

Using Microsoft Excel Spreadsheets in Strategic Planning

Information systems have driven the vast, relatively recent changes ...