How to Use the Excel TREND Function? A Step-by-Step Guide
(Note: This guide on how to use the Excel TREND function is suitable for all Excel versions including Office 365)
Excel has a variety of functionalities that help in organizing and computing large amounts of data. One peculiar feature that makes Excel stand out from other similar spreadsheets is its ability to predict or forecast the data based on the existing input data.
If you have a set of data and are wondering what the data might look like in the future, Excel has built-in functions to guide you. You can use the TREND function to help you forecast or predict the data based on past entries.
In this article, I will tell you what the Excel TREND function is, how they work, and how to use them.
You’ll Learn:
- What Is the Excel TREND Function?
- How Does the Excel TREND Function Work?
- How to Use the Excel TREND Function?
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What Is the Excel TREND Function?
The TREND function in Excel is one of the many statistical formulas that helps you compute a linear trend based on the given set of data. This function uses the least square method to arrive at a predictive value for the given set of data.
The resultant of the function is usually a number that is a result of the two sets of data, namely the existing input(X) and output(Y) data. The function works by predicting the value of the Y variable for the required values of the X variable based on the progression of Y.
This formula is used for any financing and accounting purposes to predict the rate of growth, revenue, profit, loss, and market trends.
How Does the Excel TREND Function Work?
The Excel TREND function works based on the least square method. This method is used to find or predict the data points by using the line of best fit. This line establishes a relationship between a known x-variable and the unknown y-variable. This results in a scatter plot of points that are created with the given data and the values are predicted as the line progresses through.
Example
Consider the profits earned by a company for 12 months. The months are populated in one column (let us call this X), and the profit made is populated in another column (let us call this Y). The company wants to make a big investment and wants to know the predictions of profit for their next 6 months.
The known value of time is entered in cells A7 to A18 and the corresponding profits made during this period are populated in cells B7 to B18. Now, the target is to find or predict the profits made during the period of the next 6 months which are populated in cells A19 to A24. (Alprazolam)
In this case, you can use the Excel TREND function to predict the profits over time, given the data of time and profit made over the past.
How to Use the Excel TREND Function?
Now we know what the Excel TREND function is, let us see how to use it with the examples mentioned above.
By Entering the Formula
- To use the function, first, select a destination cell. In this case, let us choose cell B19.
- Enter the TREND formula either in the destination cell or in the formula bar. You can enter the formula =TREND( either in the destination cell or formula bar.
Syntax
=TREND(known_y_values,known_x_values_,new_x_values,const)
here,
known_y_values denote the range of cells that contain the existing values. In this case, cells B7 to B18 hold the values for profit over time.
known_x_values correspond to the selected known values of Y. In this case, cells A7 to A18.
new_x_values correspond to the existing values of X for which the values of Y need to be predicted. In this case, cells A19 to A24.
const only takes values as TRUE or FALSE. When the constant value is FALSE, the value of the constant is considered 0. When there is a constant value between data and the data points regress normally, you can have a const value of TRUE.
Note: The first three parameters in the formula (known_y_values, known_x_values_, new_x_values) take individual or array of cells as inputs. The output of the formula will be a range of cells equal to the number of cells selected in new_x_values and the resultant values are spilled over a range of cells.
- Press Enter.
This gives you the predicted values for the given set of data.
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By Selecting the Formula From Main Menu
Another way to use the Excel TREND function is from the main menu.
- Select the destination cell.
- Navigate to Formulas. Under the Function Library section, click on the dropdown from More Functions. Under Statistical, scroll down to select the TREND function.
- This opens up a dialog box called Function Arguments. Enter the range of cells or drag on the range of cells to populate the fields.
- Click OK. This gives the trend over the values given as inputs.
In this example, we had time as a factor and predicted the profit values. You can also change the axes and use the profit values to predict the time taken to attain them.
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Frequently Asked Questions
What is the difference between FORECAST and TREND functions in Excel?
Both the functions are used to predict the values of future events, but the primary difference between the two functions is that the FORECAST is used for a single value and the TREND function is used for an array or multiple values.
Which is better: a trendline chart or using the formula to see the trend?
If your focus is to showcase the predictions of the trend, then choosing the trendline chart to represent data would be appropriate. In case you want to know the exact particular values based on the existing values, you can choose the TREND formula.
What is the easiest way to predict the trend?
Based on the values, you can create a line chart and use it to predict the trend. If the chart is predominantly going up, the trend is supposed to be positive and if the chart is going downwards, the trend is supposed to be negative.
Closing Thoughts
Based on the existing past values, use the TREND function to know or predict the values from the given set of data. Knowing the trends helps in taking any decisions and helps plan future actions in real-time.
You can also use this data to create a chart to showcase and effectively present the data.
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Simon Calder
Chris “Simon” Calder was working as a Project Manager in IT for one of Los Angeles’ most prestigious cultural institutions, LACMA. He taught himself to use Microsoft Project from a giant textbook and hated every moment of it. Online learning was in its infancy then, but he spotted an opportunity and made an online MS Project course - the rest, as they say, is history!