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This forecasting method is best suited for non-linear data models with seasonal or other recurring patterns. How to forecast in Excel using exponential smoothingĮxponential smoothing forecasting in Excel is based on the AAA version (additive error, additive trend and additive seasonality) of the Exponential Triple Smoothing (ETS) algorithm, which smoothes out minor deviations in past data trends by detecting seasonality patterns and confidence intervals.

Linear forecast - predicting future values using linear regression.

Exponential smoothing forecast - time series forecasting based on historical data with seasonal or other cycles.

Depending in your needs, you can choose one of the following methods: Microsoft Excel offers a few different forecasting tools including built-in features, functions, and graphs. So, you should always double check the results before making a decision.

However, forecasting doesn't tell the future definitively, it only shows probabilities. This method is commonly used to make educated guesses on cash flows, plan budgets, anticipate future expenses or sales, and so on. Forecasting is a special technique of making predictions for the future by using historical data as inputs and analyzing trends.