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I am planning to create a drill down report - sales summary by dept, if you click dept users are able to drill down to sales detail.
ideally we'd like to output this report to excel format, wondering if the excel file will still preserver the drill down capability?
I would say no
You are pasting to Excel data not Qlikview functionality
I agree with Robert Mika.
Ask yourself (or your customer) why you would like to that to happen.
If the answer is doing some more analysis, your next job is to make that analysis possible in QlikView and forget about XLS completely.