# What is exponential trendline, The 5 Different Trend Lines Explained - The Data School Australia

How to use trendlines By Editor Published: May 23, There are a number of analytical tools businesses can use and using trendlines can present a clear picture of trends in your business by connecting a number of points on a graph. What is revealed is a possible downturn or upturn in the direction of the group of values identified in the data. Understanding how to use trendlines can help reveal what might happen in the future. Predicting the future Trendlines allow businesses to see the difference in various points over a period of time.

I will try to explain the differences and when to use them. On Tableau, you can download the Superstore sample dataset and put sales on Columns and Profit on the Y-axis to follow along.

### Exponential Functions in Excel

If we choose the circle under the marks card we get a scatter plot. Here this would try to see the relationship between sales and profit.

The linear graph can sometimes be unrealistic, for example, the y-intercept is negative. Linear trend line.

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The name derives from its shape, an exponential or rapid increase. A logarithmic equation is similar to the inverse of the exponential function.

A trendline is a line superimposed on a chart revealing the overall direction of the data. Google Charts supports three types of trendlines: linear, polynomial, and exponential. Linear trendlines A linear trendline is the straight line that most closely approximates the data in the chart. To be precise, it's the line that minimizes the sum of squared distances from every point to it. In the chart below, you can see a linear trendline on a scatter chart comparing the age of sugar maples to the diameter of their trunks.

Here Ln represents the natural logarithm or log base e. The graph tends to rise very quickly and then trails off slowly rising as the x value increases. The power trend line does not have a constant and is dependant on the x-axis value and a constant determined by tableau.

It may look similar to the linear function in the graph, but it is created from a completely different function. The R squared value is always between 0 and 1 and represents the explained variation divided by the total variation.

- The type of data you have determines the type of trendline you should use.
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Going through the iterations of the different trend lines using the superstore data between profit and sales I found the power trend line to have the highest R squared value. Of course, I would not recommend using the trend line that has the highest R-value all the time, as visualisation is the most important thing to consider.

Excel trendline equation is wrong - reasons and fixes Excel trendline types When adding a trendline in Excel, you have 6 different options to choose from. Additionally, Microsoft Excel allows displaying a trendline equation and R-squared value in a chart: Trendline equation is a formula that finds a line that best fits the data points. R-squared value measures the trendline reliability - the nearer R2 is to 1, the better the trendline fits the data. Below, you will find a brief description of each trendline type with chart examples. Linear trendline The linear trend line is best to be used with linear data sets when the data points in a chart resemble a straight line.

If it looks nice and matches up with a lot of the points and is easy to comprehend then use it. What is exponential trendline, use some intuition. If the graph looks like it slopes upwards in a curve fashion then a linear trend line is not the best to use.

However, a linear trend line does have the advantage to be able to clearly see whether the trend is upwards or downwards sloping, and what the magnitude what is exponential trendline easier than other lines. P-Value There is P or probability value assigned to the trend line. The lower this value the better.

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- Excel trendline types, equations and formulas

Without going into stats too much, Tableau is computing how well your trend line fits the model based on an F statistic with a hypothesis that an intercept only model is accurate. If P is low we reject this and fail to reject or accept, but we can never truly accept a hypothesis the alternate option that this trend line accurately describes the data. A low p value may be a bad thing as the line may not be the best model to follow.

To put it another way, there is a 1-p chance that the coefficient of the trend line is not 0.