How to Create an Algorithm in Excel (5 Examples)

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In this article, we will provide a brief and thorough overview of create an algorithm in Microsoft Excel. First, we will give a glimpse of what an algorithm means in Excel. Then we will demonstrate create 5 different types of algorithms in Excel including Machine Learning Algorithm, Betting Algorithm, Lottery Prediction Algorithm, Decision Tree Algorithm and Rainflow Counting Algorithm.

In Excel, algorithms can be used to perform tasks such as data analysis, financial calculations, statistical computations, conditional formatting, and more. By creating and using algorithms in Excel, users can efficiently analyze data and generate insights, making it a valuable tool for a wide range of applications in various fields.

We hope you will find this article informative and useful. So, let’s get into the main discussion!

1- an overview image of how to create an algorithm in Excel

Download Practice Workbook

You can download the practice workbook from here.

What Is an Algorithm in Excel?

An algorithm in Excel is a series of steps or instructions designed to perform a specific task or handle a problem. Excel provides a wide range of built-in functions and formulas that users can utilize to create algorithms tailored to their needs. These algorithms can be used to perform tasks such as data analysis, financial calculations, statistical computations, conditional formatting, and more.

For example, a simple algorithm in Excel could be calculating the sum of a range of cells. This can be achieved using the SUM function, which adds the values of specified cells together.

Create an Algorithm in Excel: 5 Examples

In this part, we will show you create 5 types of algorithms in Excel in brief. Let’s go through the following part of the article.

1. Machine Learning Algorithm

Machine learning is a branch of artificial intelligence (AI) that teaches machines new abilities. It can foresee the future and learn from our practice data. However, machine learning is the best approach for extracting relevant facts from disorganized data. Here are a few types of machine learning approaches in Excel.

Types of Machine Learning in Excel

You can perform various types of machine learning operations in Excel. Microsoft Excel is not built for the machine learning process, so there are many limitations. Often, you need to install add-ins to get the desired output.

  • Linear Regression: Linear regression creates machine learning models. Excel supports this capability without add-ins. In this article, we will demonstrate do this. Regression analysis statistically examines the connection between a dependent variable and an independent variable. Regression predicts dependent variables based on independent factors. Moreover, it is an easy machine-learning algorithm.
  • Time Series Forecasting: Historical data can be used to predict the future. The FORECAST, TREND, GROWTH, STDEV, etc. functions are useful for this. You can use Excel for the time series forecasting.
  • Cluster Analysis: You can group similar values together on the basis of one or more input variables.
  • Decision Tree: Decision trees in Microsoft Excel let you make intelligent choices. The application may draw a tree from numerous circumstances and decisions. The tree can adapt to data changes. It is mostly used for business predictions, data analysis, c-level leaders, and even personal events. Excel can create decision trees using charts and data.
  • Image Recognition: Excel can be used to recognize images. Excel add-ins written in Python are helpful for this.

Although Excel can do these types of operations, it should not be used for a large set of data.

Now, we will use Linear Regression Analysis to show you how Excel makes machine learning more interesting. Here are the necessary steps that you need to follow:

Step-1: Prepare Training Data

To demonstrate the whole procedure, we have taken the following sample dataset including 10 rows and 4 columns which are Employee Name, Experience (Years) and Salary of a company.

In this process, we will find out a machine-learning model chart and a modeled salary structure for the employees. Here, the dataset is preprocessed. If it is not, then you need to preprocess the data, which means – discarding missing data, encoding categorical data, etc.

2- preparing training data for linear regression analysis

Step-2: Select Model

In this section, we will enable the Data Analysis add-in for Excel. Then, we will perform the Regression Analysis with the training data to select a model for the machine learning process.

3- selecting data analysis from data tab

  • Secondly, the Data Analysis dialog box will appear. Now, select Regression and click OK.

4- selecting regression from data analysis dialog box

  • Thirdly, in the Regression window, insert range D5:D14 as Y and range C4:C14 as X. As the salaries are dependent on experience, salary will be the Y values and experience will be the X
  • Then make sure you check Line Fit Plots and Labels.
  • Now, select H4 as the Output Range since we want the analysis data in the current worksheet.
  • Finally, click OK.

5- inserting input range and output range in regression window for linear regression analysis

  • Hence, we will see the regression analysis outcome in the current sheet. We will also see there are some regression parameter values (coefficients, standard Error, t Stat, etc.).

6- regression analysis outcome

  • But most importantly, you will need the analysis data from the graph. Here, it plots both the Series Data (approximate salaries) and Predicted Data (salaries for modeling).
  • Now, give your graph a title if you want. However, we named this chart Machine Learning Model.

7- giving title to the analysis graph

Step-3: Predict Data

For this part, we will create a machine-learning model chart and a modeled salary structure. Here, the chart analyzes the given data and predicts the trendline. By using the predicted trendline equation, we will generate a modeled salary structure.

  • First, right-click on any of the points on this chart and select Add Trendline.

8- selecting Add Trendline after right-clicking on any points of the chart

  • Afterward, select Linear and check Display Equation on Chart from the Format Trendline window.

9- editing format trendline window for linear regression analysis

  • Thereafter, you will see the straight-line plot along with the equation for this machine-learning model.

10- added straight line along with the equation for machine-learning model

  • Now, we will develop a formula using this equation to model the salaries. For this purpose, we have created a new column to store the Modeled Salaries.
  • Type the following formula in cell E5 and press ENTER.
  • Now, AutoFill the remaining columns in the column to apply the formula.
  • So, this will provide the salary for an employee with 0 years of experience.

11- calculating modeled salary to predict data for regression analysis

Step-4: Evaluate Model’s Performance

In this step, we will find the difference between the actual values and the predicted values. Then, these values can be used to evaluate the accuracy of the model. Moreover, if more values are known, then the model can be updated.

  • First, type the following formula in cell F5 to compare with real data and press Enter.
  • Then AutoFill the rest of the cells to apply the same formula.

12- finding the difference between actual values and the predicted values

  • Additionally, we have found the predicted salaries for four more unknown values.
  • If the actual values are known, you can rerun the regression analysis using these values. Thus, the model will be better.

13- predicted salaries for four more unknown values

Following these steps will allow you to perform machine learning in Excel. In terms of working with time, we require this for a variety of reasons. Hopefully, you can now make the necessary adjustments with ease.

2. Betting Algorithm

In this part, we will discuss another type of algorithm named Betting Algorithm. A sports betting algorithm locates objective reference points from which to calculate the likelihood of each possible outcome. By assessing teams’ ability more accurately than bookmakers, the program will eventually find lucrative betting opportunities. A good betting model, however, can present opportunities that most bettors would never consider. Moreover, the algorithm can help us to find:

  • Identifying the issue
  • Constructing the solution
  • Monitoring outcomes
  • Professionalism

Using Excel functions and the calculation of the data given, we can build an algorithm that will provide us with possible outcomes in no time. To illustrate, we take a dataset that represents the Soccer Kicker fixtures of a week. Here, columns B & C have the list of the teams and the rest consists of their previous match records. We have shown a portion of the dataset in the image below.

14- dataset for building betting algorithm

We will use Excel’s COUNTIF, SUM and IFERROR functions to calculate the data. After implementing the functions accurately we can predict the winning possibilities of any team. Here, we have selected two teams: New York and Miami. You can select any team to calculate the possibilities.

We can see from the result that we get 4 points for the home team and 1.333333 for the away team. We can therefore predict that the home team has a much higher chance of winning.

15- created betting algorithm

Please check out this article on ExcelDemy for more information: Betting Algorithm in Excel

3. Lottery Prediction Algorithm

Now, we will discuss the Lottery Prediction Algorithm. An algorithm that assists in selecting the appropriate number combinations is known as a lottery prediction algorithm. This algorithm will generate a large number of random numbers, and we will predict the numbers that are most likely to occur based on the random numbers. Here, we will repeat the tasks multiple times to increase the probability of prediction.

To demonstrate the procedure of building a lottery prediction algorithm in Excel, we will use 2 columns. In the 1st column, there will be a series of lottery numbers. And in the 2nd column, we will calculate the weightage value of the serial number. Weightage value means the probability of selecting the serial number. Here, we have inserted the Serial Number of the lottery up to 50.

16- preparing dataset for lottery prediction algorithm

We will use the COUNTIF function, Conditional Formatting and the RANDBETWEEN function to complete the whole calculation. As mentioned earlier we have repeated the tasks multiple times to increase the probability of prediction and reached the stage shown in the below image. We can see that Serial Numbers 25 and 38 are the most probable numbers.

17- found most probable numbers after repeated calculation

You can also easily determine the probability of a specific lottery by using the COMBIN function. The COMBIN function will find the total possible number of groups from the given values.

You can check out this article on ExcelDemy to create a lottery prediction algorithm in Excel: Lottery Prediction Algorithm in Excel

4. Decision Tree Algorithm

Suppose you are in a situation where you need to make a certain decision based on some specific condition. Decision Tree Algorithm can help you out in this type of scenario. Decision trees use a tree-shaped model to describe alternatives and their probable outcomes of specific events, cost reduction, and maximum output from limited resources. With this method, an algorithm is made using only conditional control lines.

The three major components of a decision tree are decision nodes (possible options), chance nodes (probability), and end nodes (outcomes).

To demonstrate to you, we have taken a dataset, namely “Product Price of ABC Beverage Limited”. We will create a decision tree for four different events where we have attached a dataset that describes two decision compressing of four different events.

18- dataset for building Decision Tree Algorithm

The image attached below depicts the required shapes that we will use to draw the tree.

19- required shapes to build decision tree algorithm

First, we have made a basic outline of the tree and then we have labeled & input values in the Decision Tree. With Excel’s IF, SUM, ABS, and MAX functions, we are able to get the best decision from our dataset, which is 560.

20- build decision tree algorithm

To create a Decision Tree Algorithm in Excel, please check out this article on ExcelDemy: Make Decision Tree Algorithm in Excel

5. Rainflow Counting Algorithm

In this section, we will discuss our last algorithm which is the Rainflow Counting Algorithm. The Rainflow Theorem calculates stress rounds from a time series. Depletion cycles are stress-related relaxation and tension. Rainflow Counting by Matsuishi and Endo was the first commonly utilized method for cyclic loading delays or procedures. We can use the Rainflow Counting Algorithm to count stress signal cycles to evaluate its stress component.

Establishing the Rainflow Counting Algorithm in Excel might be tough without the right procedures. This tutorial will lead you through the two steps needed to create the rain-flow counting technique, which calculates the number of damage cycles based on a Weight-Time reading. We will get started on this experiment by putting together a dataset first. The algorithm will be constructed with the help of Excel VBA code.

Firstly, we will establish a data model for the Rainflow Counting theorem. The dataset has three columns: Indicator, Damage-weight, and Time Interval. In the next steps, we will make other necessary information, like Maximum Indicator and Total Time Amount. Time Accretion and Damage Origin are the next two information boxes.

21- preparing dataset for rainflow counting algorithm in Excel

For the reversal array, two columns will be needed, titled Indicator and Damage-weight. As a final step, we will show the other four columns: Indicator, Field, Mean Value, and Cycle Count.

22- preparing other columns to complete the dataset

Then, we will open the Visual Basic for Applications window to build the Rainflow Algorithm in Excel and run the VBA code to figure out the rainflow cycles.

Finally, it will provide the desired output, like the following.

23- output after building rainflow counting algorithm in Excel

To create a Rainflow Counting Algorithm in Excel, please check out this article on ExcelDemy: Rainflow Counting Algorithm in Excel

Make a Flowchart in Excel

A flowchart is a diagrammatic representation of a workflow or process. Basically, we use flowchart to analyze and design a solution model. You can create a flowchart in Microsoft Excel, Word, and PowerPoint. Flowcharts can help show the connections between different data points, making your numbers clearer. Moreover, flowcharts help a viewer to understand the whole procedure of a new project plan in brief steps. They especially come in handy when presenting a new project to the board of executives.

Flowcharts display steps as different-shaped boxes. To represent the order of the workflow, the boxes are connected by lines and arrows. A more effective kind of flowchart is an Interactive Flowchart. In this flowchart, decision steps are included instead of just showing the one-way workflow. The workflow order can also be modified.

Check out these two articles on ExcelDemy for a detailed overview of creating a one-way workflow flowchart and an Interactive Flowchart in Excel: Create a Flowchart in Excel and Make an Interactive Flowchart in Excel

Frequently Asked Questions

1. What are 3 ways to write an algorithm?

We can express an algorithm in many ways, including natural language, flow charts, pseudocode, and of course, actual programming languages. Natural language is a popular choice since it comes so naturally to us and can convey the steps of an algorithm to a wide audience.

2. What are the 4 main algorithms?

Here are four main types of algorithms:

  • Sorting Algorithms
  • Searching Algorithms
  • Graph Algorithms
  • Machine Learning Algorithms

3. What are the 4 logical functions in Excel?

In Microsoft Excel, there are four main logical functions that we often use to analyze logical conditions and return true or false values. These functions help you do conditional calculations and make choices based on certain factors. The four logical functions in Excel are:

  • IF Function
  • AND Function
  • OR Function
  • NOT Function

Key Takeaways from the Article

  • In this article, we have provided a brief and thorough overview of create an algorithm in Microsoft Excel.
  • First, we have discussed what an algorithm means in Excel.
  • Then we have explained create 5 different types of algorithms in Excel.
  • Showed a step-by-step procedure of all methods.
  • Also discussed make a flowchart in Excel.
  • Provide solutions to frequently asked questions by readers.


The purpose of this article is to provide you with a concise and comprehensive overview of create an algorithm in Excel. Don’t forget to download the practice file. We hope this was helpful. Please let us know in the comment section if you have any queries or suggestions. Please visit our website, ExcelDemy, a one-stop Excel solution provider, to explore more.

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Nujat Tasnim
Nujat Tasnim

Nujat Tasnim, BSc in Computer Science and Engineering from American International University-Bangladesh, has a year-long tenure with ExcelDemy. Initially a Content Developer at SOFTEKO, she transitioned to the Software Team as Junior Software Quality Assurance Engineer. Currently serving as a Junior SQA Engineer at SOFTEKO, she excels in SDLC, STLC, and requirement analysis and possesses profound insights into OOP-related software development processes. Nujat is also proficient in design software like Photoshop and Illustrator, contributing diverse skills to her... Read Full Bio

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