The standard method for calculating the target is they take the actual income for a financial year and add 20%. It is based on what is actually achieved not what the target was. Ie Target for year X is $1 Billion. If actual achieved is $1.2 Billion then the next years target is $1.2 billion +20%.
That is how it used to be calculated, not sure what is actually happening these days - haven't bothered to do the sums...