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    Additional Funds Needed

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    Please see attached. Please work the formula in steps.Last year's sales = So $400,000 Last year's accounts payable $40,000
    Sales growth rate = g 30% Last year's notes payable $20,000
    Last year's total assests = Ao $140,000 Last year's accruals $30,000
    Last year's profit margin = M 15.0% Target payout ratio 30.0%

    a. Based on the AFN equation, what is the AFN for the coming year?
    b. Interpret the answer
    c. If notes payable increase what is expected to happen to AFN?

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    https://brainmass.com/business/finance/additional-funds-needed-255237

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    Last year's sales = So $400,000 Last year's accounts payable $40,000
    Sales growth rate = g 30% Last year's notes payable $20,000
    Last year's total assests = Ao $140,000 Last year's accruals $30,000
    Last year's profit margin = M 15.0% Target payout ratio 30.0%

    a. Based on the AFN equation, what is the AFN for the coming year?
    AFN = Increase in assets - increase in spontaneous liabilities - increase in retained earnings
    The increase in assets requires investment. A part is met ...

    Solution Summary

    The solution explains how to calculate the amount of additional funds needed.

    $2.19

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