Explanation

Target-based analysis determines what input is required to achieve a specific business target.

Example

Target:

₹5,00,000 Sales

If Selling Price = ₹1,000:

Required Quantity = Target Sales ÷ Selling Price

Result:

500 units

Using Goal Seek

If profit is the target, use Goal Seek to calculate the required:

  • Quantity
  • Price
  • Cost

Business Questions

Use What-If Analysis to answer:

  • How many units must we sell?
  • What price is required?
  • What cost reduction is needed?
  • What sales level achieves our target profit?
  • What happens if demand increases?
  • What happens if costs increase?

Practice

Build a target analysis model for a business with sales and profit targets.

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