Sensitivity Analysis in Microsoft Excel

One of the finest features in Microsoft Excel is sensitivity analysis using either a table (Excel 2003) or 'What-if' in Excel 2007. Suppose you want to start a cybercafe or a restaurant in a new mall. You have done a study on the footfall and the kind of people who visit the mall. You have also found out about the business atmosphere, security and rent or the outright purchase price. You also know the rates in the market that other businesses are charging, let's say, for surfing the net per hour. You then estimate your capital costs like doing up the cybercafe and the price of the computers. You also use the Excel spreadsheet to estimate and calculate the number of people you'll need to run the show and the amount of salaries you'll have to pay. You have also estimated other variable costs like electricity and phone.

From the above data in the Excel worksheet you can calculate your total monthly or yearly costs. Now based on a certain price that you will charge the customers, number of computers and working hours you can calculate your revenue per month or per year. From the data of revenue and income you can easily calculate the profit. Till now everything was easy to implement in Excel.

Now you decide to find out how your profit can vary if you vary the charge per hour or the number of people who will visit your cybercafe or establishment. Of course, you cannot charge what you want but you can get a good estimate by observing what others are charging and what quality of service and environment they are providing.

Arranging all your data properly, click on 'Data' in the ribbon in Microsoft Office 2007 or 'Data' in the menu bar in Excel 2003. In Excel 2007 select 'What-if' analysis and finally 'Data Table...'. In the popup window in the 'Row input cell' type the data that you have input horizontally next to the profit and in the 'column input cell' write down the price and vary it it by 1% 0r 2% so that that Excel can perform an analysis for, say., $0.5 per hour charge for a cybercafe to $1.5 per hour. The horizontal values can be the number of people per hour or month or year that will visit the shop and keep on varying the values by a certain estimated percentage. Click 'OK' and you can see how your profit varies with the number of customers and the price you charge. This is also known as a two variable table because you calculated the changes in your profit based on two parameters - price and number of customers.

You can also do a single variable sensitivity analysis by selecting only one parameter.

You can use the 'Data' and 'Table' feature in Excel 2003 to implement the same analysis.

The practical implementation of the above sensitivity analysis in the form of a training video can be found in the link below.

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Develop the Sensitivity of Completing Your Own Product Research to Excel in Trading

Just as you have developed keen sensitivity in knowing what is legitimate and what is fraudulent with years spent in investing in ecommerce, we will try to answer today the classic question of whether or not the Forex Megadroid is a scam. Does it really deliver what it promises to thousands of sellers in the industry today? Has anyone have been known to make real money out of using it in live trading?

If you are still in search of a lucrative and remarkably functional foreign exchange market trading software and is on the verge of deciding whether to go or not to go with the Forex Megadroid robot then you probably have several unanswered questions in mind. It is a wise move to weigh all information you have before you go spending your hard earned money on something, after all there is nothing wrong with ensuring you are getting real worth for your money. I have developed the same sensitivity of checking out the validity of a software's claims first before purchasing. Forex trading may have been a long time lucrative industry to many but I still do not take the lax way of taking in everything that is launched in the market, remember that the internet lurks with all imaginable scammers waiting for their next victim. One does need to be really cautious about knowing any recently launched software or tool.

To be frank and transparent, I was as skeptical as you are now when I first encountered the Forex Megadroid. Looking at its back testing result looked so surprisingly positive to me that I first thought it has been tampered. But looking at the back testing result that dates back to as far as eleven years, yes, since 1999, I was completely amazed about its consistent up trend, as regular as on a monthly basis! So I had to ask myself which all started a product research I have completed for the Forex Megadroid. Of course, if I am really serious about getting answers to my questions, I need to look into its creators first. I also need to know for myself the basic mechanisms that it uses in trading in order to understand how it works.

Albert Perrie and John Grace is a formidable tag team who created the Forex Megadroid mechanisms, they have been known to be professional traders with a boast of collectively forty years of trading experience tucked under their belts. They are also the inventors of the RCTPA or the Reverse Correlated Time and Price Analysis. This is simply a trading analysis mechanism or forex trading software core engine that has been based on Artificial Intelligence. Have your questions answered and complete your own product research about it.

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