What is a Pivot Table in Excel?

A pivot table (or PivotTable, as Microsoft calls them) is a dynamic and interactive tool in Microsoft Excel that allows you to summarize and analyze large datasets quickly. It provides a flexible way to organize and manipulate data, making it easier to identify patterns, trends, and outliers. Unlike traditional tables, Pivot tables enable users to rearrange and reorganize data effortlessly, making them an invaluable asset for anyone dealing datasets, no matter how big or small.

In the realm of data analysis and spreadsheet magic, Excel’s Pivot Tables stand as a beacon of efficiency and insights. Whether you’re a seasoned Excel user or just starting your spreadsheet journey, understanding what a pivot table is and how to use it can revolutionize the way you analyze and visualize data. In this guide, I’ll unravel the mysteries behind pivot tables, exploring their functionalities and showcasing their potential for transforming raw data into meaningful information.

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Understanding the Power of Pivot Tables in Excel

When you have a large sales dataset with thousands of records (rows of information), and for each record we have fields (columns) such as invoice date, invoice number, salesperson, sales quantity and amount, VAT, etc, it becomes obvious that you need a pivot table.

A pivot table is an essential tool when you want to create a detailed sales summary, where your information is categorized or grouped by some of these fields, e.g. region, or salesperson. It also allows you to apply filters and directly create visual representations via PivotCharts.

Without a pivot table, it would take a lot of time and manual effort to analyze the data in such a large dataset.

Now, I have a sales report with multiple sales transactions (rows) and for each transaction, we have a number of fields (columns) of data, e.g. invoice date and salesperson. Firstly, look at the dataset without using a pivot table:

After applying the pivot table, see how it becomes so easy to get insights from the messy data. From the pivot table report, I can easily get the total value “Sum of Sales” against each Category of product. The report also summarizes the total quantity (“Sum of Qty“) of products sold under each category. This means the pivot table can quickly perform a range of calculations that help users understand the data better.

Why is It Called a Pivot Table?

A pivot table allows users to pivot or rotate data from one orientation to another. Users can change the settings of a table by reorganizing the data. You can pivot or rotate the rows into columns, columns into rows, move data fields, and apply filters to see the summarized data.

It allows a user to quickly pivot and swap out the data elements (fields), as well as the arrangement of these fields. You can quickly move things this way, and that way, without having to write and re-write any formulas. This is why it is appropriately called a pivot table.

What is a Pivot Table Used For?

A pivot table is used for analyzing and summarizing large amounts of data. There are various uses of a pivot table except for summarization and analysis. Users can customize calculations, filtering, visualization, etc.

A pivot table is used for the following purposes:

Calculate totals, averages, counts, percentages, and other summary statistics for your data.
Pivot, rearrange, and filter data to achieve patterns and trends.
Group and categorize data based on specific criteria.
Perform calculations within a Pivot Table, including mathematical operations and custom formulas.
Visualize data patterns and trends by creating charts and graphs directly from the pivot table.
Present data in a clear and organized format.
Do a comparative analysis between different trends and categories.

What is the Minimum Requirement to Create a Pivot Table?

You can convert your data table into a pivot table. However, your data should be structured appropriately.

To create a pivot table in Excel, you must meet some requirements:

Each column should have a heading.
The headings of the columns should all be in the same row.
No merged cells should not be present in the table.
Remove subtotals or grand totals from the dataset. You can easily add totals to your PivotTable
No empty rows or columns.

Important tip

After creating a pivot table, don’t change the column headers unless you really need to! It may mess up your pivot table as the old field name is no longer found, so all information relating to that field will be removed from your pivot table.

After renaming a column in a dataset, you need to refresh pivot tables that are linked to that dataset (click anywhere within the pivot table then press Alt-F5.) Then review the pivot table carefully for any changes. If the renamed column was part of the pivot table, then you will need to find the new field name in the list of fields, and add it back in.

Sample Excel Data for Pivot Table

A pivot table has several features to deal with the dataset. To demonstrate that, I have prepared a dataset of sales reports.

Here I have included the details of the products such as invoice data, invoice number, salesman, and category with their sales, VAT, and total amount of the products.

By a sales report dataset, users can analyze the performance of sales efforts of an organization. On top of that, they can also identify trends, patterns, and best-selling products. Furthermore, they can set monthly or yearly goals regarding that.

From this dataset, we will create a pivot table. Then, we will summarize and analyze the data based on the sales category. After that, we will identify the trend and pattern of a specific category. In addition to that, we will then sort the data just the way we want it.

Create a Pivot Table in Excel

To create a pivot table in Excel, follow these steps:

Select the range of data.
Go to Insert tab.
Click on the dropdown of PivotTable.
Select From Table/Range option.
Choose New Worksheet from the “PivotTable from Table/Range” dialog box.
Now, click OK.

Now, you have created a new pivot table. Choose the fields we want to show, from the PivotTable Fields pane on the right.

Here, I have added “Category” under the “Rows” area. That means each row in our pivot table shows a summary of a different category. In the “Values” area, I have added the “Sum of Quantity” and the “Sum of Sales“.

In the “Filters” area I have added the “Salesman” field, so that we can filter on the information relating to one (or more) salespeople, to analyse their performance.

What is the Difference Between a Table and a Pivot Table in Excel?

A table in Excel contains all the data of a tabular dataset and organizes it into rows and columns. It has structured column headers where each row contains a record. We can use a table for data entry and storage.

Here is a structured table where I have stored the sales records:

A pivot table represents a summary of the existing tabular dataset. Pivot tables are used to summarize and analyze the data in a table, efficiently. For example, if I want to see the results of salesperson Kevin, I added the Salesman field to the Filters area of the pivot table:

From these above images, we can clearly see how a pivot table differs from a tabular table in Excel, and how it makes analysis so much easier.

In a tabular table, if we apply a filter to the Salesman column, we still need to check all the columns. On the contrary, we can see a neatly summarized sales report for a specific salesperson, in the pivot table. We can see the summarised details of four fields (Salesperson, Category, Quantity and Amount) using a pivot table.

Do Pivot Tables Slow Excel?

Creating tons of pivot tables can slow Excel down, but only if you don’t plan properly. When you create a pivot table, Excel stores a cache of the source data in the file to improve performance during data analysis and queries. However, this caching can lead to larger file sizes and slower performance if you create separate pivot tables for the same data table multiple times.

To resolve this issue for a file, you can create a single pivot table. Then copy the pivot for all other pivots. Use the same data table for all pivot tables within a file. This approach will make your data management easier and more efficient.

What is the Benefit of an Excel PivotTable?

Pivot tables in Excel summarize the data quickly. Additionally, you can analyze the data within a few seconds. You can sort data as per your wish. Besides that, pivot tables in Excel also offer to create a dashboard with slicers, charts, and other elements to analyze data easily. Pivot tables update the data by only clicking on refresh in the Excel ribbon. Moreover, the error rate gets lower by using pivot tables.

Summarize the dataset: In this dataset, I have taken a summary of the product category Electronics. If I need any more information, I can add it by PivotTable Fields.
Sorting Data: You can sort the data in the pivot table by right-clicking on the first cell of the table. Then, go to Sort Options choose the column name and sort in ascending or descending order.
Here, I have sorted the column sum of quantity by descending order to check which product is the best selling in the electronics category.
Creating Dashboards: You can easily analyze data, trends, and patterns by creating a dashboard with charts, slicers, and other elements. Here, I have created a simple dashboard to view the trends and patterns in Excel, by inserting a PivotChart and a slicer.
Important – On updating the pivot table: In Excel, pivot tables don’t auto update like formulas. If your underlying data has changed, you need to refresh the pivot table (and here, the PivotChart). To update them, first click on the pivot table, to display the PivotTable Analyze ribbon (or PivotChart Analyze, if you clicked on the chart). Here, click on Refresh and it will automatically update the pivot table.

With the help of a pivot table, you can greatly reduce your hassles while dealing with large datasets. You can save time and minimize errors by using these techniques and tools.

What Are the Limitations of Pivot Tables?

Even though pivot tables offer numerous advantages, they also have some limitations in Excel. These are some noteworthy limitations when dealing with pivot tables in Excel:

Record Limit: Pivot tables have a maximum limit of 500,000 records.
Field Combination Limit: You can create 40 row and column combinations in a pivot table. E.g. if you have 20 fields in the Rows area, you can have 20 fields in the Columns area. If you have 10 in rows, you can have 30 in columns, etc.
Manual refresh: Not necessarily a limitation, but something to be aware of. By default, pivot tables do not update automatically like Excel formulas, and need to be refreshed when required. Pro tip: You can refresh all your pivot tables quickly by selecting any cell in your workbook, and pressing the keyboard shortcut Alt – Ctrl – F5).

Conclusion

In conclusion, a PivotTable in Excel is a game-changer for data analysis. By providing a flexible and dynamic environment, PivotTables empower users to extract meaningful insights from large datasets with ease. Whether you’re a business analyst, financial professional, or a student, mastering the art of PivotTables is a skill that can significantly boost your productivity and decision-making capabilities in Excel. So, dive in, experiment with your data, and unlock the full potential of Pivot Tables in Excel.

Frequently Asked Questions

What is the purpose of a pivot table in Excel?

The purpose of a Pivot Table in Excel is to simplify complex data by providing a powerful tool for data analysis, summarization, and visualization. It allows users to quickly organize, filter, and calculate data to gain insights, spot trends, and make informed decisions. Pivot Tables enhance data clarity and facilitate effective reporting and decision-making.

Why do we pivot data?

In Excel, we pivot data to reorganize and summarize it in a way that makes it easier to analyze, visualize, and draw insights. Pivoting data transforms it from a flat table into a structured format that simplifies complex datasets, allowing for better data analysis, reporting, and decision-making.

What are the four components of a Pivot Table?

To create a pivot table, the four key components of a Pivot Table are Rows, Columns, Values, and Filters.

Rows: These represent the categories or items you want to analyze. They form the vertical structure of the Pivot Table.
Columns: Columns help organize and categorize data horizontally, often providing additional insights.
Values: These are the data points you want to analyze, such as sums, averages, or counts. They form the core of your analysis.
Filters: Filters allow you to narrow down the data displayed in the Pivot Table based on specific criteria or conditions. They help you focus on the most relevant information.

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