Goal Seeking

AAA

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.

INVESTOPEDIA EXPLAINS '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. Magic Formula Investing

    A money-making strategy that teaches investors a common-sense ...
  2. Coinsurance Formula

    The homeowners insurance formula that determines the amount of ...
  3. Flat Benefit Formula

    A method of calculating an employer's contribution to an employee's ...
  4. Unit Benefit Formula

    A method of calculating an employer's contribution to an employee's ...
  5. Future Value - FV

    The value of an asset or cash at a specified date in the future ...
  6. Present Value - PV

    The current worth of a future sum of money or stream of cash ...
RELATED FAQS
  1. Why was Microsoft subject to antitrust charges in 1998?

    On May 18, 1998, the Department of Justice filed antitrust charges against Microsoft (Nasdaq:MSFT ). The charges were brought ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Investing With A Purpose

    Your reasons for investing are bound to change as you go through the ups and downs of life. Setting goals is the first step in determining which investment vehicles are right for you.
  2. Retirement

    Financial Planning: It's About More Than Money

    Determine what you need to do now to make a drastic lifestyle change later.
  3. Professionals

    Microsoft Excel Features For The Financially Literate

    Here are some of Excel's functions and features that a financial professional can use to make his or her job more efficient.
  4. Entrepreneurship

    Run Your Finances Like A Business

    Think of yourself as your own little company. To make it run smoothly, you need to take a look at your books.
  5. Professionals

    What does C-Suite Mean?

    C-Suite is a slang term used to describe the highest level senior executives of a corporation. This is the decision-making, power center of a company. These individuals are usually paid well, ...
  6. Entrepreneurship

    Go To College Or Become An Entrepreneur?

    The rising cost of higher education and high unemployment rate following the Great Recession has caused many young people to question the value of college.
  7. Entrepreneurship

    Best Checking Accounts For Small Businesses

    What you need to know to choose the best checking account for your small business – and where to look.
  8. Entrepreneurship

    How to Make Money with YouTube

    YouTube is the third most visited site in the world, and numerous people are making money thanks to the site's popularity. Here's how you can do it.
  9. Investing

    What is Asset Management?

    In the investment world, asset management refers to active management of an investor’s portfolio by a financial services company – usually an investment bank.
  10. Investing

    Who are Stakeholders?

    “Stakeholder” is used in commerce to describe any party who has an interest in a business or enterprise. Traditionally, stakeholders in a corporation are shareholders, employees, customers and ...

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center