Question

Excel has a function called a what-if analysis that is designed to help businesses make better financial decisions. How could you see businesses using reverse calculations to maintain control of spending and inventory?

Answer 1

Businesses can use reverse calculations in Excel's what-if analysis to maintain control of spending and inventory. They can input their target profit margin and adjust variables in Excel's what-if analysis to determine the impact on the inventory budget.

Step-by-step explanation:

Businesses can use reverse calculations in Excel's what-if analysis to maintain control of spending and inventory. Let's say a business wants to determine how much they can spend on inventory while maintaining a target profit margin. They can use reverse calculations by inputting their target profit margin and the desired outcome into Excel, and then adjusting different variables such as costs and prices to see the impact on the inventory budget. This allows businesses to make informed decisions about spending and inventory management to achieve their financial goals.