Elevate your Pareto analysis skills with Excel

The Pareto principle is a powerful concept for business.

In this episode we'll explore this principle (also known as the 80/20 rule) and learn how to apply it effectively in Excel for smarter, data-driven decisions.

Discover how to pinpoint vital data – such as the 20 per cent of clients generating 80 per cent of your revenue as an example – to create valuable insights.

We'll also dive into Excel's powerful analytical tools, including Pareto charts, the UNIQUE function, SUMIFS, and the power of PivotTables to bring your Pareto analysis data to life.

You'll understand how to combine these features with techniques such as conditional formatting and custom charting to segment your data, visualise the 80/20 distribution and prioritise your efforts for maximum effect.

For fast reference, use the episode timestamps:

• 0:07 – Introduction to the Pareto principle and Excel
• 0:40 – Explanation of the 80/20 rule
• 1:10 – Background on Pareto and the principle
• 1:40 – Overview of Excel features related to Pareto analysis
• 2:25 – Explanation of the Pareto chart
• 3:25 – Limitations of the built-in Excel Pareto chart
• 4:00 – Creating a combo chart to mimic the Pareto chart
• 4:15 – Use of UNIQUE, SORT and SUMIFS functions in Pareto analysis
• 4:45 – Overview of pivot tables and their role in Pareto analysis
• 5:10 – Adding cumulative percentage to pivot tables
• 6:25 – Tracking client progression over time with Pareto analysis
• 6:55 – Using pivot table filters to identify top 80% clients
• 7:45 – Introduction to slicers in pivot tables for segmentation
• 8:22 – Segmentation with formulas and the FILTER function
• 8:43 – Overview of conditional formatting related to Pareto analysis
• 9:05 – Adding interaction to conditional formats
• 9:44 – Importance of investigating the universality of the 80/20 rule
• 10:00 – Conclusion and encouragement to focus on key factors in analysis

Listen to this episode now to gain practical tips and techniques to apply the Pareto principle across various business scenarios, helping you work smarter, not harder.

Listen now.

Host: Neale Blackwood CPA. He has more than 20 years of experience as a Microsoft Excel educator and is the author of more than 200 INTHEBLACK articles as well as a book, Advanced Excel Reporting for Management Accountants.

You can find a CPA at our custom portal on the CPA Australia website.

Would you like to listen to more Excel Tips episodes? Head to CPA Australia's YouTube channel.

CPA Australia publishes four podcasts, providing commentary and thought leadership across business, finance, and accounting:

• With Interest
• INTHEBLACK
• INTHEBLACK Out Loud
• Excel Tips

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Email the podcast team at podcasts@cpaaustralia.com.au