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 Reporting & Accounting

7 Nuances That Make Insurance Agency Accounting Unique

While insurance brokerage accounting isn’t necessarily more complex, it is unique when it comes to integrating operations and financial reporting. Whether your agency is in the early stages of getting off the ground or you are an established one looking to grow, below are several topics that should be taken into consideration when evaluating if… View Article

September 29, 2022Steve Rochen

Financial Reporting & Accounting

Questions Every CPG Accounting and Finance Team Should Be Asking

Best-in-class consumer packaged goods (CPG) accounting and finance departments are particularly adept at understanding their product-driven companies, integrating themselves into their organizations and pushing finance and accounting insight throughout the company. Companies that want to develop best-in-class departments can take strides by asking the right questions and taking care to work their way to the… View Article

September 14, 2022Bob Clark

Financial Reporting & Accounting

5 Signs Your Accounts Payable Department Could Be More Efficient

The Accounts Payable department is often considered something of a forgotten branch of the Accounting department. While it plays a pivotal role in ensuring that the company stays in good graces with its vendors, it is often considered to possess simple processes and not require modernization. In reality, the Accounts Payable (AP) department is often… View Article

August 18, 2022Ellen Vayner

See All

Back to Insights