Goal seek is used to find missing values in some specific cases.
For example - in a business case, the price of each unit of a particular product is, say $50. The business generated a revenue of $6950 through the sale of this product in a year. But, now the number of units of the products sold is missing and we want to find it out.
We know revenue = price per unit × number of units.
So we would entry the known data in excel.
NOTE- the revenue should be written in formula form instead of writing it directly.
So our missing value is number of units sold which would give us a revenue of $6950 at a price of $50.
1- Go to data tab>select what-if-analysis option > select goal seek.
2- a small dialog box will appear with three fillings - 1-set cell 2-To value 3- by changing cell.
3-set cell - this cell must be a formula. In the above example, it will be the cell in which we wrote the formula of revenue.
4- to value - this will be the numeric value which we want. In the above example, we knew our revenue was $6950. So we will set the revenue formula cell to the value of $6950 here.
5- by changing cell- this part includes the cell whose value we want to find. In the above example, it will be the cell of number of units sold which was missing.
6- press Okay and our task is done. The missing value will be found.
However, the goal seek is of limited use since it can manipulate /change only one cell at a time and the changing cell should be a constant.
General market related questions for Actuarial students!
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