Trendline

 

This example teaches you how to add a trendline to a chart in Excel.

1. Right click the data series, and then click Add Trendline...

Add Trendline

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2. Choose a Trend/Regression type. Click Linear.

3. Specify the number of periods to include in the forecast. Type 3 in the Forward box.

4. Check "Display Equation on chart" and "Display R-squared value on chart".

Format Trendline

5. Click Close.

Result:

Trendline in Excel

Explanation: Excel uses the method of least squares to find a line that best fits the points. The R-squared value equals 0.9295, which is a good fit. The closer to 1, the better the line fits the data. The trendline gives you an idea which direction the sales are going. In period 13, you might be able to achieve a sales of almost 120. You can verify this by using the equation. y = 7.7515 * 13 + 18.267 = 119.0365.

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