16 – DataTables
Professor Shoemaker
Fall, 2012
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The first thing to know about Data
◦ Tables: This really beats using functions!
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Data Tables let you ask “What If” questions
quickly and easily.
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CSC 141 ‐ Professor Shoemaker
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16 – DataTables
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Acme Widgets is considering introducing a
new model of Widget – the Q27
Customer have been asking about a Widget
with cutting-edge quantum mechanical
features
◦ The “Q” in Q27 stands for Quantum
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This would be the first quantum mechanical
widget for Acme and management is
concerned that it may not be profitable
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The Engineering department has worked up
some numbers of the cost to make the Q27
The Marketing department has made some
projects of selling price and how many Q27s
could be sold
The Accounting department has given you
some expense numbers
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16 – DataTables
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Using the numbers from Engineering,
Marketing and Accounting it’s now your job
to determine if the Q27 Widget could be
profitable under a variety of different
outcomes
◦ What if we sold more or fewer Q27s than we
assume?
◦ What if customers won’t pay the price we think is
right?
◦ What if our cost are higher or lower than we
project?
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16–DataTables.xlsx
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16 – DataTables
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The Assumptions
are the numbers
you’ve been
given
Projections are
your calculations
of profit given
the assumptions
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Variable Costs are
the costs incurred
to make one widget
◦ The parts that go
into a widget
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What are some
other real-life
examples of
Variable Costs?
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Fixed Costs are the costs
the business incurs just
to stay open even if
there is no production
and no sales
Fixed Costs are “What it
takes to keep the lights
on.”
What are some other
real-life examples of
Fixed Costs?
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The Revenue
projection is the
product of Units
Sold and Selling
Price per unit.
If we sell 2,500
Q27s at $1,400
apiece the
revenue will be
$3.5M
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Variable Costs is
the product of
Units Sold and
Cost of Material
per Widget
It will cost us
$2.75M to make
2,500 Q27
widgets
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Fixed Costs come
straight over
since they aren’t
dependent on the
number of Q27s
we make
Fix costs
are…fixed.
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16 – DataTables
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Net Profit is just
Revenue less the
Variable and
Fixed Costs
It’s the money we
have left over
after we’ve paid
everyone we owe.
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To be profitable, the Q27 has to sell enough
units at a high enough price to be able to pay
for
◦ The variable costs – the materials for each widget
◦ Pay for the Fixed Costs
◦ Have some profit left over.
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16 – DataTables
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The net profit has to be substantially more
than we could make by just putting the
amount of the fixed and variable costs in the
bank.
Why?
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Assumptions are only estimates of what
might happen in the market place
Sometimes estimates can be way, way off
◦ http://www.wired.com/gadgetlab/2010/06/fourreasons-why-microsofts-kin-phone-failed/
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Before going forward, management wants to
consider would happen if the things turn out
differently and expected
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16 – DataTables
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Management wants you to calculate what
Revenue and Net Profit would be if the
number Q27s sold turned out different than
marketing’s projection of 2,500 units.
What would revenue and net profit be at
various number of Q27s sold starting at
1,000 units and going to 4,000 units in steps
of 500?
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The Excel Data Table feature lets you
compute a set of output numbers based on a
set of input values
In this first example, we’ll compute Revenue
and Net Profit at 7 different levels of Units
Sold
◦ The input value is Units Sold
◦ The output values are Revenue and Net Profit
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There are two types of Data Tables:
◦ 1 Variable and 2 Variable
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In this example we are going to vary only one
value - the Units Sold – so, this problem is a
1 Variable Data Table
In a 1-Varible table you can vary only one
value but you can compute several values
from it
In this case we’ll compute Revenue and Net
Profit while varying Units Sold
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The completed One-Variable table will
look like this
Input Value
We vary Units
Sold from
1,000 to
4,000 in steps
of 500
Output Values
The Data
Table
calculates
Revenue and
Net Profit for
each value of
Units Sold
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You can set up a One-Variable Data Table
with any number of output columns
◦ We could have added a column for Variable Costs
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A One-Variable table can have any number of
rows
But a One-Variable table can vary only one
value – Units Sold – in this example.
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The left most
column has the
value being varied
Create values from
1,000 to 4,000 in
steps of 500
◦ Use formulas for all
cells but the first.
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The header row of an output column contains
a reference to the cell to be computed in that
column
Since the second column is Revenue, the
header of the column must be a reference to
the Revenue cell in the Projections
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16 – DataTables
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Cell I5 contains a reference to F5
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Cell J5 contains a reference to F9 (Net Profit)
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16 – DataTables
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The output column headers must be a
reference to the value to be computed
The Data Table feature will use the reference
in the header of the column to compute each
value in the rows of the column
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Using the reference in the header of the
column the Data Table will compute Revenue
and Net Profit for every value of Units Sold
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To make the computations, we tell the Data
Table how to find the Input Cell
First, select the entire Data Table including
the headers
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Then From the Data tab select What-If
Analysis then Data Tables
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Units Sold is a column, so in the Column
input cell field make a reference to the Units
Sold field in the Assumptions
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Poof! The Data
Table computes the
values for Revenue
and Net Income for
each value of Units
Sold
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The column headers must be references to
formulas in the Projections for the Q27.
But they show numbers and we want them to
show “Revenue” and “Net Income” instead.
We’ll use Custom Formatting to display labels
instead of numbers
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Right click on the Revenue header cell and
select Format Cells
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Select Custom for the
Category and enter
“Revenue”;”Revenue” in
the Type field.
Format the Net Income
header in the same way.
Note that the cells still
contain the number,
they just display labels.
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This table shows that
Acme will lose money
until it sells just under
2,000 Q27s.
That’s the Break Even
Point
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16 – DataTables
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To make the data easier to grasp, use
conditional formatting to highlight the
profitable cells.
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What is the Break Even point if the
Q27 sells for $1,200 or for $1,500?
What if the Cost of Materials turns out
to be $1,250 per Widget?
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CSC 141 ‐ Professor Shoemaker
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16 – DataTables
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You can set up a One-Variable Data Table
with any number of output columns
◦ We could have added a column for Variable Costs
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A One-Variable table can have any number of
rows
But a One-Variable table can vary only one
value – Units Sold – in this example.
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With a Two-Variable data table you can vary
two values
But you can compute only one value from
each combination of the two.
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CSC 141 ‐ Professor Shoemaker
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16 – DataTables
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In this example we
are going to vary
two values: Selling
Price and Units Sold
We’ll compute one
value: Net Profit for
each combination
of the two.
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If the Selling Price is
$1,500 and we sell
3,000 widgets, our
Net Profit will be
$605,000.
The intersection is
what’s computed
and why we can have
only one value
produced from two
variables
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16 – DataTables
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The upper left
cell of the Two
Variable table
must be a
reference to the
value to be
computed in the
table.
In this case, it’s
Net Profit
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Use custom
format to display
Units Sold in
H15.
Enter Selling
Price as the title
over the columns
of the table.
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16 – DataTables
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Add values and formulas to setup the two
numbers being varied
◦ In row 16, vary Selling Price from $1,300 to $1,600
in steps of $100
◦ In column H vary Units Sold from 500 to 4,000 in
steps of 500.
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To make the computations, we tell the Data
Table how to find the Input Cell
First, select the entire Data Table including
the row and column with the two variables
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16 – DataTables
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Then From the Data tab select What-If
Analysis then Data Table
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Selling Price is the top row of the Data Table, so
in the Row input cell field make a reference to
the Selling Price field in the Assumptions
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16 – DataTables
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Units Sold is the left hand column of the Data
Table, so in the Column input cell field make a
reference to the Units Sold field in the
Assumptions
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Poof! You get a data table.
Use conditional formats to highlight the
profitable and unprofitable cells of the table.
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16 – DataTables
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The Data Table shows very clearly the effect
on profitability of various combinations of
Units Sold and Selling Price
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Behind the scenes, it plugs every combination of
Price and Units Sold into the Assumptions and
inserts the Net Profit in the cell at the intersection.
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16 – DataTables
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The best way to test is to mimic what the
Data Table does
Try out several combinations of price and
units sold in the Assumptions and check that
the Net Profit matches the cell at the
intersection in the data table.
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What if the Cost of Materials turns out
to be $1,250 per Widget?
What if you increased the Sales and
Marketing budget by $100,000?
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CSC 141 ‐ Professor Shoemaker
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16 – DataTables
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With a Two-Variable data table you can vary
two values
But you can compute only one value from the
two.
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CSC 141 ‐ Professor Shoemaker
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