Excel Tutorial: How To Calculate 7 Day Moving Average In Excel

Introduction


Are you looking to gain valuable insights from your data using Excel? One important tool in data analysis is calculating a 7 day moving average. This calculation helps to smooth out fluctuations in data, providing a clearer picture of the overall trend. Whether you are tracking sales, stock prices, or any other time-based data, knowing how to calculate a moving average can be invaluable.

Let's dive into understanding what a 7 day moving average is and the importance of using it in data analysis.


Key Takeaways


  • A 7 day moving average helps to smooth out fluctuations in data, providing a clearer picture of the overall trend
  • Calculating a moving average in Excel is valuable for analyzing time-based data such as sales or stock prices
  • Prepare your data by organizing dates in one column and values to average in another column
  • Use the AVERAGE function in Excel to calculate the moving average
  • Adjust the moving average period as needed and review and update the calculation for accuracy


Step 1: Prepare your data in Excel


Before you can calculate a 7-day moving average in Excel, you need to make sure your data is organized in a way that allows for easy calculations.

A. Open the Excel spreadsheet containing your data


First, open the Excel file that contains the data you want to work with. This could be a sales report, a stock price history, or any other dataset that you want to analyze using a moving average.

B. Ensure your data is organized with the dates in one column and the values you want to average in another column


Make sure that your data is organized with the dates in one column and the values you want to average in another column. For example, column A might contain the dates, while column B contains the corresponding sales figures or stock prices.

It's important that your data is organized consistently and without any gaps or irregularities, as this will affect the accuracy of your moving average calculations.


Step 2: Use the AVERAGE function


After setting up your data and deciding on the moving average period, you can now calculate the 7-day moving average using the AVERAGE function in Excel.

  • A. Select the cell where you want the moving average to appear
  • Click on the cell where you want to display the 7-day moving average.

  • B. Type "=AVERAGE(" and then select the range of cells you want to average
  • Once the cell is selected, type in "=AVERAGE(" and then highlight the range of cells that you want to include in the moving average calculation. For example, if your data is in cells B2 to B8, you would type "=AVERAGE(B2:B8)".

  • C. Close the parentheses and press Enter
  • After selecting the range of cells, close the parentheses and press Enter. This will calculate and display the 7-day moving average in the selected cell.



Step 3: Add the moving average trendline


Once you have your chart set up with the data and the basic moving average line, you can further enhance it by adding a trendline to visualize the trend more clearly.

A. Select the chart you want to add the trendline to

Click on the chart to select it. This will activate the chart tools menu at the top of the screen.

B. Click the "+" icon on the right-hand side of the chart and select "Trendline"

Once the chart tools menu is activated, click on the "+" icon on the right-hand side of the chart. This will open a drop-down menu with various options.

C. Choose "Moving Average" from the options

From the drop-down menu, select "Trendline" and then choose "Moving Average." This will add the moving average trendline to your chart, showing the average value of the data points over a certain period.


Step 4: Adjust the moving average period


After adding the moving average trendline to your Excel chart, you can adjust the period to calculate the 7 day moving average.

  • A. Double click on the trendline to open the Format Trendline pane
  • First, ensure that the chart is selected, then double click on the moving average trendline to open the Format Trendline pane.

  • B. In the "Period" field, enter "7" to calculate the 7 day moving average
  • Within the Format Trendline pane, locate the "Period" field. Enter "7" to specify the 7 day moving average calculation. This will adjust the trendline to display the average of the past 7 days.

  • C. Close the pane to apply the changes
  • Once you have entered "7" in the "Period" field, close the Format Trendline pane to apply the changes to the moving average trendline on the chart.



Step 5: Review and update the moving average


Once you have calculated the 7-day moving average in Excel, it's essential to regularly review and update the moving average to ensure accuracy and reflect the most recent data points.

A. Check the moving average calculation for accuracy
  • Verify the formula: Double-check the formula used for calculating the moving average to ensure it is accurate and has been applied correctly to the data set.
  • Compare with manual calculation: Cross-verify the moving average values with manual calculations to ensure accuracy.

B. Update the range of cells for the AVERAGE function if needed
  • Adjust the range: If there are new data points to be included in the moving average calculation, update the range of cells for the AVERAGE function to incorporate the latest data.
  • Ensure consistency: Make sure that the range of cells remains consistent with the time period specified for the moving average.

C. Ensure the trendline reflects the most recent data points
  • Update the trendline: If you have plotted a trendline based on the moving average, ensure that it accurately reflects the most recent data points by adjusting its range as necessary.
  • Monitor changes: Regularly monitor the trendline to identify any significant shifts or trends in the data that may require adjustments to the moving average calculation.


Conclusion


In conclusion, calculating a 7 day moving average in Excel is an essential technique for analyzing trends and patterns in your data. It helps smoothen out fluctuations and provides a clearer picture of the overall trend. By utilizing this method, you can make more informed decisions based on your data.

We encourage our readers to apply this technique to their own data analysis and see the difference it can make in their decision-making process. Whether you are analyzing sales figures, stock prices, or any other time series data, the 7 day moving average can provide valuable insights.

For those looking to further enhance their Excel data analysis skills, there are numerous additional resources available online. Websites such as Microsoft's official Excel support page, tutorial videos on YouTube, and online courses on platforms like Coursera and Udemy can provide in-depth knowledge on various Excel data analysis techniques.

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