Additional Funds Needed (AFN) Calculator

Get a clear picture of the additional funds your business needs for growth with AFN Calculator. Includes a simple pie chart visualization for easy decision-making.

Additional Funds Needed Formula

The formula for calculating AFN is:

AFN = (A*/S0) * S - (L*/S0) * S - MS1

Where:

• A* = projected total assets
• S0 = current sales
• S = projected sales
• L* = projected total liabilities
• MS1 = additional external financing required

Additional Funds Needed Example

Suppose ABC Corp. is planning for next year and has projected the following financial data:

• Projected total assets (A*): $500,000
• Current sales (S0): $1,000,000
• Projected sales (S): $1,200,000
• Projected total liabilities (L*): $350,000
• External financing available: $100,000

Using the AFN formula, we can calculate the additional funds needed:

AFN = ($500,000/$1,000,000) * $1,200,000 - ($350,000/$1,000,000) * $1,200,000 - $100,000

AFN = $240,000 - $420,000 - $100,000

AFN = -$280,000

Based on this calculation, ABC Corp. would need an additional $280,000 in external financing to support its projected growth.