2. Spreadsheet Modelling

You have probably used a spreadsheet to see what will happen when you change a value.

The sorts of things that you might have wanted to try out could be:

'If the cost of food rises by 10%, how much will that decrease the profit we make for the school fete?"

"If I reduce the number of staff in my business by two, what effect will that have on the profit at the end of this month?"

Trying out different scenarios like this is called 'modelling'.

Modelling works well in spreadsheets because all of the calculations have been set up using formulas. So, when you change one value e.g. food cost, all of the values related to it, e.g. food cost, total costs, profit will change automatically.