A moving average is a calculation to analyze data points by creating a series of averages from different subsets of the full data set. It is often used to smooth out short-term fluctuations in data in order to better observe long-term trends. Moving averages can be calculated for data sets that are actual values or for data sets that are percentages. There are three steps involved in calculating a moving average:
The number of data points you use in your moving average will depend on how smooth you want your final trend line to be. A larger number of data points will result in a smoother trend line, while a smaller number of data points will result in a less smooth trend line. In Excel, you can use the AVERAGE function to calculate a simple moving average. The syntax for this function is as follows:=AVERAGE(number1,number2,...)
For example, if you wanted to calculate a moving average for the last 3 months of sales data, your function would look like this:=AVERAGE(B2:B4)
Where B2:B4 is the range of cells containing your sales data for the last 3 months.