Goal Seeking

DEFINITION of 'Goal Seeking'

The process of finding the correct input when only the output is known. A goal-seeking entrepreneur might ask him or herself: "How much money do I have to earn per hour to gross $100,000 this year?" He or she knows the desired output, $100,000, but will have to work backwards to determine the desired input by figuring out how many hours he or she is able and willing to work in a year and then how much he or she needs to earn per hour, along with any other factors which may affect the final output.

BREAKING DOWN 'Goal Seeking'

To solve more complex goal-seeking problems, business people commonly rely on computer software. The spreadsheet program Microsoft Excel has a goal-seeking tool built in that allows the user to determine the correct input value for a formula when the desired output is known. This feature can be used, for example, to determine the interest rate a borrower would need to qualify for (the input) if he or she only knows how much he can afford to pay per month (the output).



RELATED TERMS
  1. Output Gap

    An economic measure of the difference between the actual output ...
  2. Yield Variance

    The difference between actual output and standard output of a ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include ...
  4. Efficiency

    A level of performance that describes a process that uses the ...
  5. External Diseconomies Of Scale

    External factors beyond the control of a company increases its ...
  6. Efficiency Variance

    The difference between the theoretical amount of inputs required ...
Related Articles
  1. Markets

    What is Productivity?

    Productivity is an economic term describing the relationship between outputs as compared to inputs needed to produce those outputs.
  2. Managing Wealth

    Teaching Financial Literacy To Kids: Saving For Short-Term Goals

    Children need to be taught how save their money and how to set goals for using the money they've saved. For most young kids, short-term goals are all they'll need to worry about.
  3. Financial Advisor

    A Day In The Life Of A CFO

    What would your life look like if you were CFO? We’ve interviewed three chief financial officers to find out.
  4. Investing

    Yield Curve

    Learn more about how this curve is used to predict changes in economic output and growth.
  5. Trading

    What Is GDP?

    GDP is like a price tag on a country's output, and it measures the size of the economy. Find out what it means.
  6. Retirement

    The 3 Best Retirement Calculators For 2016

    Find out the top three online retirement calculators to use in 2016 for determining how much you need to save to provide for sustainable income.
  7. Markets

    How The GDP Of The US Is Calculated

    The US GDP may not be a perfect economic measure, but the ability to compare it to prior periods and other countries makes it the most applicable.
  8. Entrepreneurship & Small Business

    Female Entrepreneurs Who Overcame Hardship

    These three female entrepreneurs overcame difficult pasts to start and nurture their own businesses.
  9. Retirement

    Is Working Longer A Viable Retirement Plan?

    People who are planning poorly for retirement are simply deciding to work longer - often out of neccessity. Is this a smart idea?
  10. Managing Wealth

    A Day In The Life Of A Portfolio Manager

    Portfolio managers go by a number of job titles, manage different asset types and work under different philosophies. Here are three examples of what they do.
RELATED FAQS
  1. How is productivity calculated?

    Learn about productivity, what productivity measures and how to compute a company's productivity level by measuring its outputs ... Read Answer >>
  2. What should my 85 year-old mother do with a deferred annuity she purchased in 1992?

    Retirement of the plan is May 2016. She had a one time investment and has never taken money out of the plan. ... Read Answer >>
  3. Should my mother roll her IRA into a fixed annuity?

    My 88 year old mother has an IRA account of roughly $200K. She is being advised to roll it into a fixed annuity.  ... Read Answer >>
  4. After fully contributing up to allowable limits in a company sponsored 401k, can ...

    My daughter just inherited some life insurance in a lump sum ($50,000). She contributes 25% of her paycheck to a workplace ... Read Answer >>
  5. What is the best way to disburse funds from a trust and how should we handle the ...

    My daughter is a trust beneficiary. The trustees attorney keeps asking her how she wants her money disbursed - cash or account ... Read Answer >>
  6. Can my daughter be held accountable for her employer's bounced checks?

    My daughter worked for an organization three years ago when she was 18. The company had trouble mainta... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center