Similarly, the total number of periods is input in cell I31 ( No_of_Periods), which generates the final date in cell J31, given by the formula Where the EOMONTH function returns the end of the month cited in cell I22 zero periods in the future, ie, the end of the month input.
This “Date Used” cell is named Start_Date and is defined as The start date of this forecast is given by I22, although it is cell J22 that is used for the formulas. Here, I assume I am considering a forecast of total costs (cell I12, given the range name Total_Costs), with costs of 20% (cell I16, Initial_Percentage_Completed) already accounted for. The aim is to get the concept across - you can then modify the maths as you see fit thereafter.Īs usual, I provide an Excel example - and make use of Excel 365 this time as I use dynamic arrays to “spill” my formulas. The aim here is to provide a simple example - not create a beast that can be tailored for any situation, spikes, normalisations, etc. This is because the underlying mathematics may cause the first and last periods to “jump” (these sort of curves are often perceived to have infinite tails) and because later periods may also see a project go into terminal decline (eg, lose market share, be reimbursed costs, etc.). Obviously, S-curves are only an approximation, and “real data” is very unlikely to ever perfectly fit an S-curve. This means you need to be able to model an S-curve. Therefore, they are frequently used to measure progress, evaluate performance, and make cash flow forecasts. This type of chart is therefore key in budget forecasting and confirming projects are on track. The point at which deceleration commences is often (but not always) at the midpoint, and this point of maximum growth is often referred to as the point of inflection.
Acceleration is gained as costs escalate, market share is gained, etc., but this cannot progress forever, and eventually it slows down once more. This type of curve often takes shape as initial traction is often slow and completion can drag on too, with the rapid acceleration in progress (highlighted by the lighter area in the graphic, above) coming in between these two endpoints.
Typically, cumulative projections analysed in this manner present in the shape of an “S”. From the above illustration, the reason it’s called an S-curve should be obvious (although some argue that the “S” actually stands for “sigmoidal”, but those are technical spoilsports). An S-curve is simply a graphical depiction of cumulative data for a project - such as costs, market share, elapsed time, or some other KPI, usually plotted against time.