We can use the **AVERAGE function** to **FIND THE MOVING AVERAGE OF A DATA**. Calculation of **moving averages** is useful for **financial forecasting**. The steps below will walk through the process.

*Figure 1- Using Moving Average for Forecasting Sales for Month 8 and 9*

**Syntax**

**=AVERAGE(RANGE)**

**RANGE**refers to the cell references that corresponds to the numbers in each cell

**Formula**

**=AVERAGE(B4,C4)**

**Setting up the Data**

With the data in **figure 2**, we will make a **forecast **of sales for the **next two months**. We will use the moving average for **every 2 months** to calculate the forecast for **month 8 and 9**.

- We will enter the
**Months**in**Row 3** - We will enter the
**Sales**in**Row 4** - Our result for
**moving average**for every**2 months**will be returned in**Row 5**

* Figure 2 – Setting up the Data*

**Calculate the MOVING AVERAGE FOR EVERY 2 MONTHS**

- We will click on
**Cell D5** - We will insert the formula below into
**Cell D5**

**=AVERAGE(B4,C4)** - We will press the
**enter**key

* Figure 3- Moving Average for the First two months*

The average value taken is that of **Cell B4** and **Cell C4**. The next average value will be of **Cell C4 **and **Cell D4** and so on.

- We will click on
**Cell D5**again - We will
**double click**on the fill handle tool which is the small plus sign you see at the bottom right of**Cell D5.**Select and drag the formula across the row to**Cell J5**to copy the formula to the other cells.

* Figure 4- Forecast for Month 8 and 9 by Moving Average*

If we were to calculate the **moving average** for **every 3 months **with the same data, we will use the formula below:

**=AVERAGE(B4:D4)**

We will click on **Cell E5** and insert the formula rather than **D5 **when working with **2 months sales **or** 2-month moving average.**

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