Trend Analysis is an important tool for decision making, which allows you to analyze the historical patterns to predict future events. Excel is not shy about tools that help you in the process. In this guide, we’re going to show you How to perform trend analysis in Excel.
Visual Trend Analysis by Using Charts
Visualizing the data can be more than enough for figuring out the pattern and predicting the future based on the trend. A simple line chart may be all you need to see the linear trend on your data without any formulas. Thus, do not hesitate to create a line chart which is usually the best to visualize a timeline.
If a basic chart is not enough, add a trendline and check the options Excel provides. You can decide between different trendline calculations, displaying the corresponding equations, and extending the trendline for forecasting.
To learn more about trend analysis with charts in a Excel chart, visit the article How to perform trend analysis with charts in Excel.
Trend, Forecast, and Forecast.Linear Functions
If you want to make calculations by yourself and see the values for each data point, three Excel functions are at your service:
- TREND: Returns values along with a linear trend.
- LINEAR: Predicts a future value by using existing values in a linear regression basis.
- FORECAST: Legacy function, identical with LINEAR.
Since the FORECAST.LINEAR is the up-to-date version, we will continue with it. Also, although TREND and FORECATS.LINEAR functions have different definitions, each returns the same results due to the identical linear algorithm they are using.
The difference between them is their syntax. While the TREND function demands a range of x-values to return corresponding y-values, FORECAST.LINEAR function can take single points. Also, the TREND function has an optional Boolean argument to set the constant b to equal 0 in the equation y = mx + b.
Since the TREND function can use the range of x-values, a single formula is enough to return all y-values at once. However, you need to be a Microsoft 365 subscriber to use this formula as a regular formula. Otherwise, you should press Ctrl + Shift + Enter to execute your formula instead of the sole Enter key. By the Ctrl + Shift + Enter combination, your formula will be recognized as an array formula and Excel will return the entire array.
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If you want to dig in analysis or need a more complex analysis tool, try the Analysis ToolPak add-in. Although the add-in is not loaded by default, it came with Excel 2007. You can activate it from the Add-ins dialog from FILE > Options > Add-Ins. Here, select Excel Add-ins in the Manage dropdown and click the Go button. Select the Analysis ToolPak and click OK.
Find the Data Analysis button under the Data tab to find the tool you need.
You can find an example in the article Use Excel for Regression Analysis to Make Better Predictions.