Contents:
What is the Goalseek tool?
The Goalseek tool helps to answer the question, "How do we get there?". This scenario analysis tool helps to design strategies to achieve a desired outcome for your selected financial metric. It also helps to identify the sensitivity, or importance, of key business drivers in achieving a given performance goal.
The Goalseek tool is accessible from the left sidebar in the Analysis tools by selecting the 'Telescope' icon.
Using the Goalseek tool
To use the Goalseek tool,
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The value listed under the 'To achieve goal' column represents a mutually exclusive change amount that is required to achieve the desired goal. In other words, if you were to drag the slider all the way to that amount, you would achieve your goal.
💡 Pro Tip: If you anticipate that an increase in price will cause a reduction in sales volume, then increase price by X% and then move the slider for sale volume to a negative change % value. This will be represented by a red indicator on the volume slider. The impact of this will be represented on the progress bar by a reduction in the KPI starting value.
Changing the period or date range
In the top right corner of the Goalseek tool, you’re able to change the period and date range displayed in the tool. The first bolded smart text option allows you to switch between viewing monthly, quarterly, or yearly results.
The second bolded smart text option enables you to choose up to which month, quarter, or year’s results you are viewing. If you imported data through the current month in ‘Step 1 - Update Data’, then those results can be included in the Goalseek tool.
Download a PDF of the Goalseek Analysis
You can download the Goalseek tool to PDF from the left sidebar. The download option is located in the bottom left corner.
Because the Goalseek tool is based on making decisions while using the tool, it is the only Analysis tool that cannot be added to custom Fathom reports. Instead, the tool is designed to be used during a business meeting with collaborators or clients and then downloaded to PDF from within the Analysis tools.
💡Pro Tip: You have the option to include a 'Basis of Preparation' or disclaimer statement as a page in PDF downloads. You can add or remove this statement in PDFs and customise the statement. Learn more in our 'Basis of Preparation statement' article.
FAQ
How can reducing price and/or volume result in an increase in cash flow?
In some cases, a reduction in revenue will result in positive cash flow outcomes.
Example 1: A reduction in price, may cause a reduction in Accounts Receivable, which could improve Operating Cash Flow.
Example 2: A reduction in sales volume, may be accompanied by a reduction in Cost of Sales, which could cause a reduction in Accounts Payable. |
In this scenario it is also helpful to understand the 'Cash Conversion Cycle' KPI along with the key working capital drivers (ie. Inventory days, Work in Progress Days, Accounts Payable Days and Accounts Receivable Days). This KPI helps to track the time between the purchase of inventory and the receipt of cash from accounts receivable. Also the 'Net Variable Cash Flow' KPI is useful for identifying if the next $1 of sales will either generate or absorb cash.
💡Pro Tip: You can see the formulas used to calculate default KPIs in the 'KPI Glossary'.
Next steps
Learn about the next Analysis tools available for additional insights into company or group performance. Or learn about the other areas of Fathom and share your discoveries with others.
What you want to do: | Where to go next: |
Learn about the Financials Analysis tool | |
Learn about the Compare and Rank tools | |
Invite others into your Fathom account to share insights | |
Create reports for your company | |
Begin forecasting in Fathom |
💡Pro Tip: The Compare and Rank tools are only available for companies in one or more Benchmark Groups.