Excel Tips

Using Goal Seek in Excel: 8020 Quick Tips

Goal Seek is a useful Excel tool that allows you to see how one data item in a formula impacts another, similar to a cause-and-effect scenario, providing an answer to the “what-if” question.

For example, let’s say your high-end apparel company is looking to go IPO once net profit percentage equals or exceeds 40%, and you are looking to identify a target sales number to communicate to your sales team.

Step 1: Identify the “target goal” in your financial statements.

In this example, “what-if” the net profit is 40%?

Step 2: What needs to happen?

Increase sales, increase “Revenue” to increase Net Profit %, but by how much?

  1. Click on “Data” tab
  2. Click “What-If Analysis”
  3. Click “Goal Seek”

Step 3: Fill in the Blanks

  1. Set Cell – What you want to change? (In this example, it’s cell I10.)
  2. To Value – Your goal, that you need 40% to IPO (.40)
  3. By Changing Cell – What needs to change? (Revenue)
  4. Click “OK”

Step 4: Evaluate Solutions

In order to have 40% Net Profit %, Revenue needs to be $190M instead of $182M.

Want More Insight?

We hope you find this Goal Seek tip useful in managing your finance, sales, and forecasting planning. You can sign up to receive notifications every time we post new insights, just by visiting our blog subscription page!

Subscribe to Our Blog Today!

Categorized in: ,

similar articles

Learn to think and approach problems like our financial consultants.

Financial Planning & Analysis

Subscription Business Model Metrics: A Systems Check

Clothing retailer Bloomingdale’s recently launched a fashion-rental-subscription service, just one example of the growing trend towards “subscription” businesses. When executed successfully, the appeal of subscription revenue is apparent – recurring revenue, increased customer lifetime value (LTV), and reduced customer churn. However, because subscription business model metrics aren’t always planned from the outset, this business model… View Article

October 10, 2019Mitch Browne

Financial Reporting & Accounting

5 Ways to Speed Up Your Month-End Close Process [Tip Sheet]

Is your company plagued with that ever dreadful lengthy month-end close? Is it taking weeks to get the books closed and financial reporting out to management? How can you improve your month-end close process, close earlier, prepare timely financials, and give management the time they need to make the right business decisions necessary to stay… View Article

October 8, 2019Gabriel Benabou

Financial Planning & Analysis

Retail Marketing KPIs & Other Retail Finance Performance Strategies

As the success of online retailers skyrockets and online shopping continues its rise in popularity, brick-and-mortar retailers have seen a significant decline in business. While most subscription-based and online businesses have a strong digital marketing team and marketing plan in place, many brick-and-mortar shops are lagging in their knowledge of retail marketing KPIs and strategies.

October 3, 2019Jackson Quach

See All