How to Calculate KPI in Excel
Using Excel to create and calculate key performance indicators can get from easy to complex. Excel has a wide array of tools that can help you to create key performance indicators. So you can then use that in your organization to track different performances.
It is also very flexible and you can then use charts and other diagrams to help visualize your collected data after a key performance indicator period had come to an end.
This is a great advantage over other tools out there because it gives you a different perspective on your data. It also helps your managers and business associates to understand your information better.
When it comes onto calculating key performance indicators in Excel it really varies because it depends on what you are tracking, over what time frame and what results are you looking for. Different key performance indicators will usually tend to have different calculations.
But if you know how to do the basic calculations like addition, subtraction, division, multiplication it will be easier for you going forward. These will help you to make calculations like averages and will also allow you to develop algorithms, creating functions etc.
Below you can see some common calculations you can use in Excel to calculate your key performance indicators.
Addition will help you to calculate everything in a column. For example calculating your sales data over a certain period of time. You can do this by using auto sum. To do this select a cell at the bottom of the column without any values in it.
Then click on auto sum, this will allow Excel to make an estimation on the right range of data. You are going to again choose auto sum to accept the range of data that Excel have selected. If you want to you can just simply choose your range of data instead.
Subtraction is another formula you can use in Excel which you can branch off from to create other complex formulas. Suppose for instance you want to know how many products were not profitable over a period of time. This simple formula would be (total products minus profitable products). To subtract numbers in Excel you can do the operation in a cell. All you got to do is add the = sign, following with the formula. For example math (= 7-3) then press enter.
Suppose you want to know how many hours it took your team to finish a project or a task. You can easily do this by division. The formula would be (total amount of project hours / total amount of persons on the team).
To implement this in Excel you have to firstly put an equal sign before your formula in a cell. Then you can put in the full formula. This can look something like (=10/5).
Multiplying numbers is also quite easy in Excel. Suppose you want to see how much you are going to spend on a project and you want to set a budget. You can calculate an hourly fixed cost of how much you want to spend over a period of time.
For example for a week this formula would look like (daily hours * hourly budget). This will then help you to track your cost to make certain everything is working in order.
In Excel you would have to put this formula in a single cell and it would look something like (=8*20).
Overall the formulas shown above will be a good starting point for when you want to create more complex formulas in Excel.
All these formulas will help you with your key performance indicators. You can find a lot of resources on the internet that can help you to create other interesting formulas for your key performance indicators.
You can start off nice by following the resource below then expand from that.