Some of the most useful and versatile tools in Excel’s arsenal are those under its Analysis ToolPak . Even the name ToolPak makes it sound like it’s a particularly powerful bunch of tools, which it is. But many Excel users don’t use any of them, because they don’t know they exist, or because they aren’t exactly intuitive to use.
What is Goal Seek?
Goal Seek is an Excel tool that allows you to find a specific value for a cell by changing another cell. For example, let’s say you have a monthly budget and you want to know how much you can spend on average per day. You can use Goal Seek to find the answer. Let’s pretend that your budget has $1000 in it, and you want to know what your daily average should be. In order to set up Goal Seek, we need two cells: one cell where we input our goal (in this case $1000) and one cell where we input our starting point (in this case zero).
In this scenario, I would type 1000 into the goal box and 0 into the start box. Once I click OK on these two boxes, Excel will calculate a new figure ($100) in the ‘goal’ column that tells me what my daily average should be so I don’t go over my allotted $1000 monthly budget.
When Should I Use it?
You should use Goal Seek when you need to find the input that will produce a desired output. For example, if you need to find the number of products you need to sell to make a profit, or how much you need to charge for shipping to break even, Goal Seek can help. If you are selling a product for $100 and want to know what the minimum price should be so that your profits are $10, Goal Seek is useful. After changing the Price cell in Excel’s goal seek function to $90, Goal Seek tells us that we need to sell 6 products. The value of one item is: 100*6=$600. Now our total profit equals: 600-1000= -400$.
A Basic Example
If you’re looking for a quick and easy way to find the solution to your problems, Excel’s Goal Seek analysis tool is a great option. Simply enter the desired result you want to achieve, andGoal Seek will work backwards to find the input value that will give you that result. Use this tool if you know what you want the output to be but not how to get there from where you are now. For example, if I wanted my monthly rent payment of $500 per month to be 20% of my monthly income, I would enter $500 in cell B2 and then type =G$2*0.2 in cell B3: Cell B3 calculates as 0.833333333333 which means my monthly income must be $8333. 33/100=$833.33. My monthly income should therefore be increased by $1667.69 (see below) in order to reach my goal of paying 20% of my income on rent every month.
When NOT to Use it
Excel’s Goal Seek analysis tool is a great way to find solutions to problems, but there are some things you should keep in mind before using it. First, make sure that your problem can be represented by a mathematical equation. Second, be aware that Goal Seek will only find one solution to your problem, so if there are multiple solutions, you’ll need to use another method. Third, remember that Goal Seek is a trial-and-error method, so it can be time-consuming. Fourth, when using Goal Seek, take into account all of the assumptions made when setting up the problem. You may need to tweak those numbers or try a different strategy altogether.