Comp Sci Session 10: Performing What-IF Analysis
Comp Sci Session 10.1 Data Tables and What-IF
Understanding Cost-Volume-Profit Relationships (pg. 166)
Cost-volume-profit (CVP) studies relationships expenses, sales, volume, and
Comparing Expenses and Revenue (pg. 166)
First component of CVP is cost or expense
There are 3 types of expenses:
Variable expenses change in respect to the amount of business a company does
o Expense such as, buying the product, making the product.
Fixed expense that must be paid regardless of the number of sales.
o Ex. Paying the employees, salaries, insurance plan, benefits
Mixed expense is a mixture of variable and fixed expenses.
Determining the Break-Even Point (pg. 168)
Break-even point is the point where revenue equals expenses. Sales below the
break-even point = lose of money, above the break-even point = increase in profit
o CVP analysis calls this break-even analysis
Cost-volume-profit (CVP) chart is a chart that displays the point where the
revenue and expenses meet.
Performing a What-IF analysis with Goal Seek (pg. 170)
What-IF analysis lets you observe the impact of changing values in a worksheet
We can input an income statement into Excel and then perform:
o What if analysis:
Change the value of an input cell and observe the effects on
o Goal seeking:
Specify the value for a calculated cell, then excel produce a input
value needed to reach that goal
Comp Sci Session 10: Performing What-IF Analysis 1 Goal Seeking
Very useful for doing simple queries to see what the effects are of changing the
value of one variable
For more complex a