What is a Scenario?

In business it can often be beneficial to explore multiple scenarios for a given situation. This allows you to see what combination of factors gives the best results; in other words, test various scenarios. With Excel 2010, you can easily explore multiple scenarios based on the same data.

In this lesson you will learn what a scenario is and how to create one. You will also learn about scenario summary reports and how to save multiple scenarios based on a given situation.

In Excel, a scenario can be described as a set of cell values that is saved and substituted into your worksheet at your convenience. If you have multiple scenarios saved, you can load different scenarios into your worksheet and compare and contrast them to see which particular set of values gives the best results. Since the worksheet will be fully calculated according to the given set of scenario data being used, you can compare and contrast the results of one set of data (scenario) with another by simply switching between different scenarios. Used in this way, Excel scenarios provide a powerful tool for performing what-if analysis.

You might use scenarios to represent different budget options, or perhaps evaluate different financial forecasts. You can use Scenarios to compare different data projections based on any number of factors.

This is how it works. The data that makes up your scenario is saved with your workbook, but it remains hidden until you use the Scenario Manager to load the scenario data. All of the scenarios you create are just versions of the same worksheet layout, with each different scenario having different values for certain key cells.