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How to Use Spreadsheets to Solve Complex Problems

A spreadsheet is a file consisting of rows and columns that helps users to easily sort and arrange data and make calculations and data analysis when required. Spreadsheets have been used to solve various problems from different fields including mathematics, physics, economic and business. Apart from simple calculations, spreadsheets can also hold and solve complex problems with ease. Thus, spreadsheets are one of the most powerful tools which can be used by businesses and individuals to evaluate and store valuable information. One can find the use of spreadsheets in different sectors such as schools, offices, banks, financial organisations, hospitals, manufacturing units, and hotels. Below are a few examples of complex problems which can be solved using a spreadsheet:


Cash Flow Forecasting

Cash flow forecasting is usually used to examine the expected cash inflow and outflow of a business in a given time period. This forecast is then used to estimate the present value of the project or business. Cash flow forecasting is often done using spreadsheets as it helps the user to visualise the data and apply formulae. The use of spreadsheets allows for automating calculations by creating templates for making forecasts.


Budget Control

Budget control is used by different organisations to keep a track on their projected budget. It is done by observing the different expenses required for the working of an organisation in a certain period of time. It is often used by managers to keep the costs under control and to compare the financial targets with the estimated budgets and adjust the firm’s performance as required.  Financial targets are often set in the form of ratios, and spreadsheets are a perfect tool for making a financial ratio analysis.



What-if Scenario Analysis

What-if scenario is one of the ways in which businesses use spreadsheets for planning and demonstrating the different projections of results obtained by selectively changing the input values. As businesses make their strategies based on different estimations, such kind of analysis helps businesses respond swiftly and effectively to dramatic circumstances.


Sales Forecasting

Spreadsheets are actively used by marketers to make sales predictions. Sales forecasting is the technique of predicting a company’s sales in the future. A precise sales forecast helps firms to predict its short-term and long-term goals and performance and to make comprehensive business decisions. Companies usually make these forecasts based on current economic trends and past sales data. They also employ both univariate and multivariate analysis in spreadsheets.


Payroll Projections

Every business organisation has a system to work out the wages of the staff. This system keeps a record of salaries to be paid to a worker based on his/her work duration, overtime, vacations, sick leaves, tax deduction, net pay, etc. It is easy for businesses to maintain these records in a spreadsheet as the wages can be automatically adjusted depending on the number of hours an employee has worked.


Statistical Analysis

Statistical analysis can be referred to as the collection of data and its presentation in different formats to explore different patterns and trends. It generally uses various methods such as estimating descriptive statistics, linear regressions, correlations, probability distribution and Monte Carlo simulation. Once the data is collected in a spreadsheet, it can be presented in formats such as tables, charts or graphs. The graphs and charts demonstrate the underlying patterns and trends of a given piece of data, which can be analysed using complex statistical methods. Statistical analysis is commonly used in dissertation writing, so it’s likely you will encounter it at some point in your student life. Find out more about how we can help with statistical analysis.