Goal seeking

Goal seeking is the process of working backwards from a target figure to determine the required inputs. For example, a manager might use goal seeking to find answers to the following questions:

  • How many customers must I add to achieve profits of $500,000?

  • How many chargeable hours must the consulting staff work per week to reach sales of $14,000,000?

  • What kind of income do I need to qualify for a mortgage of $400,000?

In essence, the person knows the desired outcome and needs to work backwards to ascertain the necessary inputs. The concept is most frequently used to determine profit levels in business planning. The functionality of an electronic spreadsheet is useful for goal seeking activities.

Related Courses

Financial Forecasting and Modeling