What is a Spreadsheet? Why do I need a Spreadsheet?

A spreadsheet is a piece of software for handling and manipulating numbers. You can write numbers down on a piece of paper and add them up. Like this:

23
12
10
45 =

But that's not a spreadsheet. However, if you bought Microsoft Excel and entered the same numbers into the software, you'd have a spreadsheet. The best part about a spreadsheet is - you don't have to do any adding up yourself! The programme will add the numbers up for you.

A spreadsheet doesn't only add up, of course. It can do a whole lot more besides simple arithmetic. It can handle financial calculations, statistical information, and do complex trigonometry. And it can make a pretty graph for you.

At it's heart, though, a spreadsheet is just a glorified calculator. The main point of using a spreadsheet is do some number crunching. The software will puzzle out the answers to sums for you, and save you a lot of time and effort carrying sevens and trying to remember what eight multiplied by six is.

Why do I need a Spreadsheet?

There are many reasons why you might need a spreadsheet. Here are few different scenarios:

Scenario 1 - Personal Investments

You have bought shares in a few different companies and want to keep track of how well, or badly, they are doing. You could enter these values in a spreadsheet:

MyShare: Share1
Price Paid: 0.25
Number Held: 1000
Total Cost: £250
Value Now: 0.35
Worth Now: £350
Profit/Loss: +£100

The spreadsheet would do all the sums for you. All you have to do is enter the correct formulas. In the spreadsheet above, if we changed the number in the "Value Now" box, the "Worth Now" box and the "Profit/Loss" box will automatically be updated. That way you could see at a glance how well your shares are doing.

Scenario 2 - Personal Finances

We only have a limited amount of money coming into the house each month. The problem is, that money seems to be disappearing pretty fast. If would be nice if we could keep track of where it's all going. A spreadsheet could help us. We could enter the data like this:

Monthly Income: £1500

Gas: 25
Electricity: 20
Phone: 35
HP: 250
Food: 350
Mortgage: 425
Car: 130

Total: £1235
Leftover: £265

Of course, we could do all that on a piece of paper. But entering the data into a spreadsheet gives us better control. We could change one value, that massive food bill, and see how much we had left over if we didn't spend so much money on food. Once the formulas are entered, the other figures would be updated automatically.

So there we have two simple scenarios where a spreadsheet might come in handy. Of course, they can be used, and often are, in a business situation. If you want to keep track of things like stock and profit margins, then spreadsheets are very useful indeed. In fact, spreadsheets are useful in a wide range of situations, both business and non-business.

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