Executives of any size business ought to be first-rate number analyzers. Profits and losses, costs and sales, salaries and bonuses all need comparing from month to month and year to year to find trends, set goals, and make wise business decisions.
When the first desktop computers became popular, spreadsheets were among the first big software sellers. They've come a long way since the first version of VisiCalc was written for the Apple II. A later spreadsheet for the IBM PC, 1-2-3, became a million-disk seller.Computer spreadsheets sold big because they're extremely versatile. They can do all kinds of numerical analysis - so long as you know what you're doing. To use them, you type in all the numbers you want to study. Then you type in the correct formulas to analyze trends in your company or product.
The program takes over, using the formulas to project yesterday's numbers into the future. The result can be a long-range picture of where your business is headed-assuming you typed in the right numbers and the right formulas and applied the right formula to the right sets of numbers.
If these spreadsheet programs work well for you, then by all means use them. But learn them well before plunging into serious dollars-and-sense analysis!
Some newer business trend analysis programs are more useful for many of us. They aim way beyond spreadsheets. They build in the correct formulas for various kinds of trend analysis, to keep you from using the wrong ones. Often, data collection is also automated. Since most people see numerical relationships most quickly via graphs, the better ones can create graphs of their results.
You may want to consider one of these specialized financial modeling programs in place of or in addition to your old spreadsheet.
The first program we recommend is Graph-in-the-Box. It makes short work of financial doodling, such as testing various rough assumptions. It's a quick study, and can be run memory resident. That means it can sit in the background, ready to pop into life and take control of your computer's screen whenever you hit its hot key.
Once you have G-i-B working onscreen, you can instruct it to draw a box around any set of numbers that's displayed, whether from a spreadsheet, word processing, or even accounting program. After boxing the data you want to work with, you select any graph type you want to use. Quick as a flash, G-i-B converts your raw figures to smooth bars, lines, pies, clusters, or other numerical X-axis analysis graphs. You can print graphs, save them for later use, or merge them into popular word processing or desktop publishing programs.
Some memory resident programs conflict with some other programs, so you can't always successfully run them in memory. Since G-i-B's maker can't guess which combination you'll try to run, the program can also work as a stand-alone.
If you understand a fair bit of numbers analysis theory, you may want to opt for Graph-in-the-Box ANALYTIC. ANALYTIC is not simply an advanced version of G-i-B. It adds 16 new graph forms to G-i-B's 11, and does X-Y axis analysis. Many users keep both programs busy. G-i-B costs $100, ANALYTIC $200. Both should be available locally. (If you can't find them, phone New England Software at 203-625-0062.)
For heavyweight business risk analysis, Risk tops our list. It analyzes the risks of business decisions by simulating future results based on past experience. If it matters to you, the Harvard Business School just required MBA candidates to own the software.
To use it, you must own Lotus 1-2-3. Because it takes over control, you don't have to be an expert 1-2-3 user, but it won't hurt!
Risk is flexible enough to develop scenarios with a couple dozen probability distributions. It performs both Monte Carlo and Latin Hypercube simulation. If you don't know what we're talking about, don't buy the program. Using it could be like pointing a loaded revolver at your head.
At $400, the program now runs only on IBM type PCs. A Mac version is in the works, but don't expect it before year's end. It should be available locally. (If not, phone Palisade Advanced Software Technologies, 607-564-9993.)
While Risk deals with the risks in current decisions, What'sBest! points the way to future growth. Utilizing what's known as linear programming, it optimizes business plans. That is, it can help you maximize profits or minimize costs, given your current resource limitations and performance needs. If you can describe in simple figures or formulas the goals you're shooting for, it can probably point out the best way to get there.
What'sBest! costs from $150 to $1,000 depending on whether you buy the less powerful personal version, more powerful commercial, or most powerful professional version. Examine what's in all three versions before buying any.
For IBM PC use, you need to own either 1-2-3, VP Planner, Symphony, or SuperCalc4 or 5. For Mac, you need Excel and Hypercard plus a hard disk drive. (If you can't find it locally, phone General Optimization, 800-441-BEST or 312-248-0465.)
As a service to readers, the columnists answer questions and send a checklist of back issues if you enclose a stamped self-addressed envelope: TBC, 4343 W Beltline Hwy, Madison, WI 53711. You can read back issues of this twice-weekly column at the electronic library, NewsNet, reachable via computer plus modem over phone lines. For NewsNet information, 800-345-1301. (C) 1989 P/K Associates Inc.