Available Slot
NetGrow

Additional Funds Needed Calculator

Estimate how much extra funding you need to support sales growth. Uses the AFN model: asset increase minus spontaneous liabilities and retained earnings.

Use the Additional Funds Needed Calculator

Enter current and forecast sales, assets, liabilities, margin, and retention. Results update as you type.

Current baseline

Current sales, assets, and spontaneous liabilities.

Forecast & profitability

Results

Additional funds needed
$1,200

You need to fund this amount (debt, equity, or asset efficiency) to support the sales increase.

Breakdown

  • Required asset increase: $40,000
  • Spontaneous liabilities increase: $10,000
  • Addition to retained earnings: $28,800

A*/S ≈ 0.40, L*/S ≈ 0.10 (from current figures).

Levers to reduce AFN

Improve margin, raise retention, or improve asset efficiency (lower A*/S) so less new funding is needed for each dollar of sales growth.

What this metric means

Additional funds needed (AFN) estimates how much new capital you must raise to support a given increase in sales, after retained earnings and spontaneous liabilities. It helps with budgeting and fundraising planning.

How to interpret your result

A positive AFN means you need to arrange debt or equity to fund growth. Use the breakdown to see the drivers; then work on margin, retention, or asset efficiency to reduce the gap.

FAQs

What is additional funds needed (AFN)?▾
AFN is the amount of external funding (debt or equity) required to support a planned increase in sales, after accounting for spontaneous liability growth and retained earnings from the higher sales.
What are spontaneous liabilities?▾
Liabilities that tend to grow automatically with sales, such as accounts payable and accruals. They partly fund the extra assets needed for higher sales, so they reduce the amount of new funding required.
What if AFN is negative?▾
A negative AFN means you have surplus funds: retained earnings and spontaneous liabilities more than cover the asset increase. You may be able to pay down debt, pay dividends, or hold cash.
How do I reduce AFN?▾
Improve net profit margin (more retained earnings), raise the retention ratio, or improve asset efficiency so assets grow more slowly than sales (lower A*/S). Tightening working capital can help.
Can I use ratios instead of current assets and liabilities?▾
Yes. If you know your asset-to-sales and liabilities-to-sales ratios, the calculator can use current sales to infer A0 and L0. We derive A*/S and L*/S from your current figures when you enter assets and liabilities.

Related tools

Browse all calculators on NetGrow.

NetGrow

Additional Funds Needed Calculator

Estimate how much extra funding you need to support sales growth. Uses the AFN model: asset increase minus spontaneous liabilities and retained earnings.

Use the Additional Funds Needed Calculator

Enter current and forecast sales, assets, liabilities, margin, and retention. Results update as you type.

Current baseline

Current sales, assets, and spontaneous liabilities.

Forecast & profitability

Results

Additional funds needed
$1,200

You need to fund this amount (debt, equity, or asset efficiency) to support the sales increase.

Breakdown

  • Required asset increase: $40,000
  • Spontaneous liabilities increase: $10,000
  • Addition to retained earnings: $28,800

A*/S ≈ 0.40, L*/S ≈ 0.10 (from current figures).

Levers to reduce AFN

Improve margin, raise retention, or improve asset efficiency (lower A*/S) so less new funding is needed for each dollar of sales growth.

What this metric means

Additional funds needed (AFN) estimates how much new capital you must raise to support a given increase in sales, after retained earnings and spontaneous liabilities. It helps with budgeting and fundraising planning.

How to interpret your result

A positive AFN means you need to arrange debt or equity to fund growth. Use the breakdown to see the drivers; then work on margin, retention, or asset efficiency to reduce the gap.

FAQs

What is additional funds needed (AFN)?▾
AFN is the amount of external funding (debt or equity) required to support a planned increase in sales, after accounting for spontaneous liability growth and retained earnings from the higher sales.
What are spontaneous liabilities?▾
Liabilities that tend to grow automatically with sales, such as accounts payable and accruals. They partly fund the extra assets needed for higher sales, so they reduce the amount of new funding required.
What if AFN is negative?▾
A negative AFN means you have surplus funds: retained earnings and spontaneous liabilities more than cover the asset increase. You may be able to pay down debt, pay dividends, or hold cash.
How do I reduce AFN?▾
Improve net profit margin (more retained earnings), raise the retention ratio, or improve asset efficiency so assets grow more slowly than sales (lower A*/S). Tightening working capital can help.
Can I use ratios instead of current assets and liabilities?▾
Yes. If you know your asset-to-sales and liabilities-to-sales ratios, the calculator can use current sales to infer A0 and L0. We derive A*/S and L*/S from your current figures when you enter assets and liabilities.

Related tools

Browse all calculators on NetGrow.