In this chapter, we'll explore how to use Excel to add trendlines to charts, a fundamental technique for analyzing data patterns and forecasting future trends.

We'll delve into various types of trendlines like linear, exponential, and polynomial to see how they can illuminate different aspects of data behavior.

Task

In this practical exercise, you'll add trendlines to a sales data chart and forecast future trends using Excel.

Note

Use the dataset from the previous chapter.

Construct a line chart for the Monthly Sales data, incorporate different trendlines, and evaluate their potential for forecasting future sales trends. Include the following types of trendlines:

• Exponential.
• Linear.
• Logarithmic.
• Polynomial with an order of 4.

Extend each trendline to predict sales for the next 15 months.

• Select the entire range of Date and Monthly Sales columns.
• Navigate to the Insert tab and select Line Chart from the chart options.
• Click on the line in the chart to select it.
• Right-click and choose Add Trendline.
• Customize trendline's color and style for clear differentiation.
• Extend the trendline by setting the Forecast option to 15 forward steps.
• Examine how different trendlines fit the historical data and what they predict for future sales.