What it calculates

Goal seek works a model backwards. Instead of asking what output a set of inputs produces, it asks what value one input must take for the output to hit a target - the break-even price, the growth rate that reaches a revenue goal, the discount that still clears a margin floor.

How it is calculated

Define the target output, the cell to solve for, and the desired value. The solver then iterates: it evaluates the model, measures the gap to target, adjusts the input and repeats until the gap falls within tolerance. Because most financial relationships are monotonic - raise the price and revenue rises - the search converges quickly, typically by bisection or a Newton-style step.

How to read the result

The answer is only meaningful if the required input is achievable. A goal seek returning a 340% growth rate has told you the target is out of reach, which is a useful answer, not a failed calculation. Always sanity-check the solved value against real constraints - capacity, market size, what customers will accept. And note that goal seek adjusts one input, so it silently assumes everything else holds, which is rarely true at the extremes.

Worked example

Fixed costs of 500,000, variable cost of 50 per unit and volume of 20,000 units. Solving for the price that yields 200,000 of profit: required revenue is 500,000 + 1,000,000 + 200,000 = 1,700,000, so the price is 85.00. If the market will not bear 85, the target is not reachable at that volume.

Common questions

What is the difference between goal seek and an optimiser?

Goal seek solves for one input to hit one exact target. An optimiser maximises or minimises an objective by adjusting several inputs at once, subject to constraints. Use goal seek for a single what-must-this-be question, and an optimiser for allocation problems with trade-offs.

Why does goal seek sometimes fail to converge?

Usually because no solution exists in the searched range, the relationship is not monotonic so there are multiple or zero crossings, or the model contains a circular reference that makes the output unstable. Widening the range or breaking the circularity normally resolves it.

Can it solve for a value that produces a negative or nonsensical result?

Yes. It is arithmetic, not judgement - it will happily return a negative headcount or a price below variable cost if that satisfies the equation. Constraining the search range and reviewing the answer for plausibility is the user's job.