How to Use Scenario Manager in Microsoft Excel

If you’re making financial decisions or comparing different scenarios, Microsoft Excel’s Scenario Manager is an invaluable tool. It allows you to save and switch between multiple scenarios to quickly analyze the outcomes of different situations. Whether you’re deciding between job offers, evaluating project costs, or testing various financial assumptions, the Scenario Manager streamlines the process.

Steps to Use the Scenario Manager in Excel

Let’s walk through an example to show how to set up and use the Scenario Manager for a financial decision, like comparing two job offers.

Scenario: Comparing Two Jobs

• Job 1 has a lower salary but a lower fuel cost due to a closer commute.
• Job 2 pays more but is farther away, increasing fuel costs.

We want to see which job leaves us with more money at the end of the month after accounting for salary and fuel costs.

Step 1: Set Up Your Spreadsheet

1. Enter the Data for Job 1:
   • B2: Salary for Job 1
   • B3: Fuel cost for Job 1
   • B4: Monthly bills
   • B5: Formula to calculate leftover money (e.g., =B2-B3-B4)

Step 2: Open Scenario Manager

1. Go to the Data tab in Excel’s ribbon.
2. Click the What-If Analysis drop-down.
3. Choose Scenario Manager.

Step 3: Add the First Scenario

1. In the Scenario Manager window, click Add.
2. Name your first scenario (e.g., Job 1).
3. In the Changing Cells box, enter the references for the cells you plan to change (e.g., B2 for salary, B3 for fuel cost).
4. Click OK.
5. Enter the values for Job 1 in the pop-up box and click OK.

Step 4: Add the Second Scenario

1. Select Add again to create the second scenario.
2. Name your second scenario (e.g., Job 2).
3. In the Changing Cells box, enter the same cell references (B2, B3) as before.
4. Click OK.
5. Enter the values for Job 2 in the pop-up box and click OK.

Step 5: Switch Between Scenarios

1. You should now see both scenarios listed in the Scenario Manager.
2. Select Job 2 and click Show to see the values for Job 2 in your spreadsheet.
3. To switch back to Job 1, select it in the Scenario Manager and click Show.

You can easily toggle between scenarios to compare the results. Once you’ve chosen the scenario you want to keep in your sheet, click Close in the Scenario Manager.

Step 6: Compare Scenarios Using Summary

If you have several scenarios and want to visualize the comparison in one place:

1. Open the Scenario Manager.
2. Click Summary.
3. Choose Scenario Summary.
4. Excel will create a summary table showing all the scenarios and their corresponding results.

This gives you a clear visual representation of how each scenario compares.

Additional Notes on Scenario Manager

• Multiple Scenarios: You can set up to 32 changing cells in your scenario. This makes it ideal for comparing multiple financial or numeric situations.
• Editing or Deleting Scenarios: To edit or remove a scenario, simply open the Scenario Manager, select the scenario, and click Edit or Delete.
• Scenario Summary: This option provides a clear and concise view of your scenario comparisons in one tab, which can be saved or shared.

Why Use the Scenario Manager?

The Scenario Manager in Excel helps you quickly compare multiple financial situations without manually changing values. It’s perfect for making decisions based on different assumptions or conditions, whether you’re evaluating job offers, investment options, or product prices.

By organizing scenarios and switching between them with ease, you can make informed decisions more efficiently. Give the Scenario Manager a try the next time you need to analyze different financial outcomes!

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