Excel linear regression formula

This example teaches you how to run a linear regression analysis in Excel and how to interpret the Summary Output.

Below you can find our data.

The big question is: is there a relationship between Quantity Sold (Output) and Price and Advertising (Input). In other words: can we predict Quantity Sold if we know Price and Advertising?

1. On the Data tab, in the Analysis group, click Data Analysis.

Note: can't find the Data Analysis button?

Linear regression excel

Click here to load the Analysis ToolPak add-in.

2. Select Regression and click OK.

3. Select the Y Range (A1:A8). This is the predictor variable (also called dependent variable).

4. Select the X Range(B1:C8).

Summary output of regression analysis excel

These are the explanatory variables (also called independent variables). These columns must be adjacent to each other.

5. Check Labels.

6. Click in the Output Range box and select cell A11.

7.

Regression analysis excel template

Check Residuals.

8. Click OK.

Excel produces the following Summary Output (rounded to 3 decimal places).

R Square

R Square equals 0.962, which is a very good fit. 96% of the variation in Quantity

how to interpret regression analysis in excel

what does excel regression analysis tell you