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EFN Estimate

Is it possible for an EFN estimate (or a 'plug number' on a pro-forma balance sheet) to be negative? If you obtain this result, do you interpret it as an indication that you've made a calculation error, or is there some other interpretation you should make?

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External funds needed (EFN) are those funds required from external sources to increase the firm's assets to support a sales increase. A sales increase will normally require an increase in assets. However, ...

Solution Summary

The solution determines if it is possible for EFN estimate to be negative.