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Transcript

(S1)

B

M

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AFN

Select an element of the equation to see the element explanation

Additional Funds Needed

Short-term assets that change spontaneously with sales (generally all current assets)

Last year's sales

Fixed assets that increase when the company reaches full capacity, such as manufacturing plants

The change in sales, i.e. total sales projected for next year - last year's sales

Short-term liabilities that change spontaneously with sales

Profit margin on sales, calculated as: (net income / by sales)

Earning that will be retained during the year in the business where it will be used to fund the projected increases in sales

Earnings retention ratio, calculated as (1 - dividend payout)

Total sales projected for next year