What this calculator does
Additional funds needed (AFN) works out external financing a growing business needs beyond what retained earnings cover. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaAFN = (A*/S₀)·ΔS − (L*/S₀)·ΔS − M·S₁·(1 − Payout ratio)
The inputs explained
| Field | What to enter |
|---|---|
| Current sales ($) | A number, measured in your currency. Starts at 5000000. |
| Projected sales ($) | A number, measured in your currency. Starts at 6000000. |
| Assets that grow with sales ($) | A number, measured in your currency. Starts at 4000000. |
| Liabilities that grow with sales (payables, accruals) ($) | A number, measured in your currency. Starts at 900000. |
| Net profit margin (%) | A number, measured in %. Starts at 6. |
| Dividend payout ratio (%) | A number, measured in %. Starts at 40. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with current sales
Every other input is held at the calculator’s starting values while current sales varies. Select any row to load that scenario into the calculator.
How the answer changes with current sales
| Current sales ($) | Additional funds needed | Required increase in assets | Spontaneous increase in liabilities |
|---|---|---|---|
| 2,500,000 | $4,124,000.00 | $5,600,000.00 | $1,260,000.00 |
| 3,750,000 | $1,644,000.00 | $2,400,000.00 | $540,000.00 |
| 5,000,000 | $404,000.00 | $800,000.00 | $180,000.00 |
| 7,500,000 | −$836,000.00 | −$800,000.00 | −$180,000.00 |
| 10,000,000 | −$1,456,000.00 | −$1,600,000.00 | −$360,000.00 |
| 15,000,000 | −$2,076,000.00 | −$2,400,000.00 | −$540,000.00 |