AFN Calculator — Additional Funds Needed
The AFN (Additional Funds Needed) formula tells a financial planner how much external capital — debt or equity — a company must raise to fund a given level of sales growth, after accounting for spontaneous financing and internally generated profits.
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Positive: external financing required to fund growth
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Sales change (ΔS)
6 000 000 − 5 000 000 = 1 000 000 - 2
Required asset increase
0,65 × 1 000 000 = 650 000 - 3
Spontaneous liability increase
0,2 × 1 000 000 = 200 000 - 4
Retained earnings increase
0,08 × 6 000 000 × (1 − 0,4) = 288 000 - 5
Additional Funds Needed (AFN)
650 000 − 200 000 − 288 000 = 162 000Positive = external financing required; negative = internally generated surplus.
Hur fungerar denna kalkylator?
AFN = (A*/S₀) × ΔS − (L*/S₀) × ΔS − (PM × S₁ × (1−d)). It measures the gap between the assets needed to fund growth and the automatic financing (spontaneous liabilities + retained profits). A positive result requires external debt or equity; a negative result is a surplus. Inputs are current and projected sales, asset/liability ratios, profit margin, and dividend payout.
Formel
How this is calculated
When a company grows its sales, it typically needs more assets — more inventory, receivables, and fixed capacity. Some of that asset need is funded "spontaneously" as accounts payable and accrued liabilities expand with activity. The remaining gap must come from retained profits or external financing (bank loans, bonds, or share issuance).
The AFN formula quantifies this gap in three terms. The required asset increase is (A*/S₀) × ΔS, where A*/S₀ is the ratio of spontaneous assets to current sales and ΔS is the change in sales — this estimates how many extra dollars of assets each extra dollar of revenue demands. The spontaneous liability offset is (L*/S₀) × ΔS, where L*/S₀ is the ratio of liabilities that rise automatically with sales (payables, accruals). The internally generated retention is PM × S₁ × (1 − d), where PM is the net profit margin applied to projected sales and d is the dividend payout ratio — what profits remain after dividends are automatically available to fund assets.
AFN = required assets − spontaneous liabilities − retained earnings. A positive AFN means the company must raise external capital; a negative value means internal sources more than cover the need, creating a financing surplus. The model assumes all ratios remain proportional to sales, which may not hold if there are economies of scale, lumpy capital investments, or capacity constraints — those cases require a more detailed pro-forma analysis.
Vanliga frågor
A negative AFN means the company generates more internal financing (retained earnings plus spontaneous liability growth) than it needs to support the projected sales increase. The surplus can be used to pay down debt, repurchase shares, or fund other opportunities.
Spontaneous assets are items that grow automatically with sales — primarily accounts receivable and inventory. Spontaneous liabilities are obligations that rise with activity without needing deliberate financing decisions, chiefly accounts payable and accrued expenses. The model assumes both remain a fixed proportion of sales.
The AFN formula assumes linear, proportional relationships between sales and all balance-sheet items. In practice, assets often grow in lumps (a new factory, a warehouse) and profit margins change with scale. Use AFN as a first approximation for planning, then build a full pro-forma income statement and balance sheet for more accurate financing needs.
Även känt som
TG we-Calculate Editorial Team. (2026). AFN Calculator — Additional Funds Needed [Online calculator]. TG we-Calculate. https://we-calculate.com/sv/calculator/afn-calculator
TG we-Calculate Editorial Team. "AFN Calculator — Additional Funds Needed." TG we-Calculate. 2026. https://we-calculate.com/sv/calculator/afn-calculator.
TG we-Calculate Editorial Team, "AFN Calculator — Additional Funds Needed," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/sv/calculator/afn-calculator
@misc{wecalculate_afn_calculator, title = {AFN Calculator — Additional Funds Needed}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/sv/calculator/afn-calculator}}, year = {2026}, note = {TG we-Calculate} }
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