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 CFO insights

Categorized in: ,

similar articles

Learn to think and approach problems like our financial consultants.

Financial Project Management

Notes from the Field: 5 Success Factors for Cross-Functional Project Management

Finance teams are often looked to for leadership of cross-functional projects. This is often the case because the ultimate project results can be measured by, or affect, financials. A budget or re-forecast process is a clear example of a cross-functional project led by Finance. From our experience in leading cross-functional projects as part of Finance… View Article

January 13, 2021Marco Moreno

Treasury and Cash Management

A 2020 Recap: Cash Management & Why Cash is Still King

Last year brought disruptions in almost every industry. We witnessed significant interruptions in order fulfillment and delivery systems, chaotic drops and soaring demand in certain categories, fresh liquidity for borrowers and cash crunches for others. And cash management underwent rapid change for those suddenly with too much or too little. Short-Term Cash Management Led to Underutilized… View Article

January 7, 2021Danelle Larsen

Financial Planning and Analysis

The End of LIBOR: Are You Ready?

With all of the happenings at year‐end, thinking about how your company structures its borrowings and contracts in the coming year is probably not at the forefront of discussions. But it should be in relatively short order, given that the end of LIBOR is nigh – and especially if the term SOFR is new to… View Article

December 17, 2020Danelle Larsen

See All