Pivot tables are used to summarize data.  The format is very general and this is one of the most powerful data reductions tools in Excel.

For many years, people used specialized programs to accomplish the functions done by Excel's Pivot Table wizard.

Even if you don't need this capability now, knowing about Pivot Tables will remind you when you do come across a problem that requires such a solution.

Let's look at typical data that are collected by many people.

Notice that there are several variables with categorical data (such as Rank, Sex and Ethn in this example).  There could be more such columns.  The categorization criterion means that there are only about a dozen or fewer different values for any of these variables.

There are also several variables with measurement data.  The characteristic of measurement data is that there is a large number of different values.  In our example, it is unlikely that there are any Salary values that are the same.  There may be the same values for a few people's Age , but in general, there is a large number of different values (much more than a dozen if this you were able to see all the data in this spreadsheet).

In summary, the data consist of several categorical variables and several measurement variables.

We want to summarize the data shown in the spreadsheet.  

Moreover, we want it so be summarized in several ways at the same time.  This will let us do some interesting comparisons.

For example, do our data show that men are promoted on the average at younger ages than women?

A cross-tabulation report, where we look at the average age grouped by both sex and rank will gives us a first answer to that question.

A "Pivot Table" is the name used in Excel to produce such a cross-tabulation. 

We are now going to run through the procedure to create a cross-tabulation report.

Let me describe the steps, then we'll go through it again so you can see what it looks like.

The analysis starts by selecting the data you want to analyze.  As usual, you click and drag to select the data area.

Then you start the PivotTable Wizard.

The wizard is quite flexible in allowing you to use data from several sources.  You'll be indicating that yhou will use a spreadsheet as your source.

The next step involves the interactive arrangement of labels for the parts of the table you will produce.

You need to select the type of summary you want for the data that will go on the inside of the table.

Finally, you need to indicate whether you want to get your results as a separate worksheet or as part of the current worksheet.

We can now see what this looks like.

The first step is to select the data you will use in the analysis.

Click and drag so that the entire data range is selected.

Then you need to start the PivotTable Wizard.

You'll find it on the Data menu, listed near the bottom as "PivotTable Report..."

Click on this to get the wizard running.

You are given a choice of four places your data might be located.

I would expect that you would ordinarily be doing a cross-tabulation from an existing spreadsheet.  There might be times, however, when you have data in an external location, such as an external data source.

You need to make sure that you have the Microsoft Excel choice selected.

The second step with the wizard is to confirm the data range.  This is a standard Excel worksheet range notation.  If you've selected the range properly, this should be correct.

If it isn't the data range you want to analyze, change it here.