FORECAST function in simple terms, plz...

[Ray Pendergast]

I need help understanding the FORECAST function in simple terms (if
possible). Do I have this straight?
Let's say I have 9 periods of history, and I want to forecast what will
happen in the 10th. I have the periods listed as numbers (1,2,3...) in
A1:A9, with period 10 in A10. Then I have the historical data for each
period in B1:B9. I put the following in cell B10:
=FORECAST(A10,B1:B9,A1:A9)
Have I used this function correctly to predict a forecast of what will
happen in period 10? Does it extrapolate between periods if I have some
missing? For instance, if I'm missing period 5, will it still calculate 10
based on an estimate of what 5 "should be"?
Thanks in advance.

 

[Mike Middleton]

Ray Pendergast -

The FORECAST worksheet function assumes a linear relationship. Before using
the FORECAST function, you should first use an XY (Scatter) chart to plot
the data and verify that a linear relationship is appropriate. If you do
plot the data, you can obtain the same results using the Add Trendline
feature.

Assuming a linear relationship is appropriate, the answer to each of your
three questions is "yes." The "should be" will be based on an average linear
relationship based on the other values.

- Mike
http://www.mikemiddleton.com