What Is the Purpose of Using a Spreadsheet?

by Steve Lander

The first spreadsheet for personal computers, VisiCalc, was designed by a Harvard Business School student as a tool to help him with a class project. Over the years, spreadsheet software has become more powerful, adding not only powerful analytical functions and tools, but also the capability to generate elaborately formatted documents. As such, a spreadsheet program is much more than just an electronic piece of ledger paper.

Accounting

Spreadsheets started out as an accounting tool. Their design mimicked a traditional ledger page, but with the added feature of having the ability to do calculations embedded in the page. Accounting remains a popular use of spreadsheets, since they are well suited to presenting balance sheet, budget and other accounting information in an organized format.

What-If Analysis

Beyond accounting tasks, spreadsheets are also a crucial tool in business decision making. Since formulas embedded in spreadsheets can include the value of a cell instead of a hard-coded number, they make what-if analysis very easy to complete. By changing one number, you can evaluate a completely different scenario. While this works extremely well in business applications, spreadsheets also have advanced mathematical, statistical and engineering functions.

Graphing

Spreadsheets include built-in graphing functions that let you generate a visual representation of a table of data. They typically include a number of different choices, including line, bar and pie graphs. You can also use more advanced functions, like 3D graphing, graphs with multiple data sets or graphs with multiple Y-axes.

Maintaining Lists

The row-and-column orientation of a spreadsheet also makes it an excellent tool for managing small lists and flat-file databases. Whether you need to track your office's inventory of computer equipment or maintain a mailing list, spreadsheets are excellent tools. Many offer the ability to sort your data and even to conduct queries on it, just like a database program.

Simple Form Design

Spreadsheets can also be useful for designing forms. Because they use columns, lining up items on the page is easy. They also have a number of different formatting options that make it simple to draw boxes and lines, while also making it easy to change the height of rows to make space for people to enter data.

Photo Credits

  • Ablestock.com/AbleStock.com/Getty Images