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.

8020 Consulting in the News

Read Our Article on Dynamic Cash-Flow Forecasting on CFO.com

We’re proud to announce CFO.com recently published a new article by 8020 Consulting’s CEO, David Lewis!

April 2, 2020Kelly Patchett

Financial Planning & Analysis

How to Build a Cash Flow Forecast to Manage Liquidity Now

Many businesses are adversely impacted by the coronavirus pandemic. During a time of uncertainty, companies should more than ever reevaluate their operational strategy and profitability forecast. Most importantly, management must have good visibility into the company’s potential of liquidity difficulties and opportunities. A well thought-out and dynamic cash flow analysis will provide stakeholders with such… View Article

March 26, 2020Joe Wirija

Manufacturing Operations Finance

Supply Chain Management: Sourcing Backup Suppliers

The Coronavirus lockdown has reminded us that unforeseen crises can impact manufacturing and supply chain lines in the short and long term. For any company, particularly in a time of crisis, it’s critical to mitigate the risk of disruptions to manufacturing and supply chain channels. Sourcing backup suppliers or alternates is an important task in… View Article

March 18, 2020Vikram Mehta

See All