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USING GOAL SEEK
Goal Seek is a tool used to find the input value required to achieve a desired outcome in a formula. It allows you to set
a target value for a cell and then adjust the value of another cell until the target value is achieved. The Goal Seek tool
is useful for financial modelling, planning, and optimisation tasks where you need to determine the input required to
achieve a specific outcome.
Let’s use an example to illustrate the concept of Goal Seek. Imagine you operate a small bakery where you sell 50
pastries for `20 each. It costs you `8 to make each pastry. Additionally, you have fixed monthly expenses of `1500.
Currently, the bakery is experiencing a loss. Now, let’s calculate how many pastries you need to sell each month to
cover your fixed costs and achieve a profit of at least `1500.
To use Goal Seek tool, perform the following steps:
Step 1: Enter data in a sheet that is used to calculate the total revenue, total cost, and profit or loss.
Step 2: Type the =B1*B2 formula in cell B5 to calculate total revenue and press Enter key.
Step 3: Type the =B3+(B1*B4) formula in cell B6 to calculate total cost and press Enter key.
Step 4: Type the =B5-B6 formula in cell B7 to calculate profit or loss and press Enter key.
Step 5: Select the Tools Goal Seek option from the Menu bar.
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