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Consider the Additional Funds Needed (AFN) equation, what happens to AFN if the firm reduces expense and therby increases the profit margin?
asked
Sep 23, 2022
in
Business
by
werdninja
information-technology
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Consider the Additional Funds Needed (AFN) equation, what happens to AFN if the firm decreases their retention ratio?
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Sep 23, 2022
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Consider the Additional Funds Needed (AFN) equation, what happens to AFN if the firm hires more people and increases their accruals?
asked
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In the Additional Funds Needed (AFN) Equation, Spontaneously generated funds are generally defined as follows:
asked
Sep 23, 2022
in
Business
by
werdninja
advanced-math
When considering the AFN equation, we exclude notes payables from our calculation of Spontaneous increases in Accounts Payables and Accruals because Notes Payable is a source of external capital
asked
Sep 23, 2022
in
Business
by
werdninja
advanced-math
When considering the AFN equation, the two sources of funds a firm has to support a sales increase are: Spontaneous increases in Accounts Receivables and Accruals and Additions to Retained Earnings
asked
Sep 23, 2022
in
Business
by
werdninja
information-technology
The Additional Funds Needed Equation (AFN) can be "intuitively interpreted" as "Outside Funds Needed = Assets I need to support the sales increase - Spontaneous Increases in Accounts Payable and Accruals - Additions to Retained Earnings"
asked
Sep 23, 2022
in
Business
by
werdninja
information-technology
In your internship with Lewis, Lee, & Taylor Inc. you have been asked to forecast the firm's additional funds needed (AFN) for next year. The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Last year's sales = S0$200,000 Last year's accounts payable$50,000 Sales growth rate = g40% Last year's notes payable$15,000 Last year's total assets = A0*$135,000 Last year's accruals$20,000 Last year's profit margin = PM20.0% Target payout ratio25.0%
asked
Aug 11, 2019
in
Business
by
Skywordsea
finance
Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0$350 Last year's accounts payable$40 Sales growth rate = g30% Last year's notes payable$50 Last year's total assets = A0*$500 Last year's accruals$30 Last year's profit margin = PM5% Target payout ratio60%
asked
Aug 11, 2019
in
Business
by
rn4life24
finance
Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0$350 Last year's accounts payable$40 Sales growth rate = g30% Last year's notes payable$50 Last year's total assets = A0*$500 Last year's accruals$30 Last year's profit margin = PM5% Target payout ratio60%
asked
Jul 31, 2019
in
Business
by
Cleopold
finance
Clayton Industries is planning its operations for next year. Ronnie Clayton, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0$350 Last yr's accounts payable$40 Sales growth rate = g30% Last yr's notes payable$50 Last year's total assets = A0*$360 Last yr's accruals$30 Last year's prof margin = PM5% Target payout ratio60%
asked
Feb 3, 2019
in
Business
by
Nerdo
finance
Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Last year's sales = S0$200,000 Last year's accounts payable$50,000 Sales growth rate = g40% Last year's notes payable$15,000 Last year's total assets = A0*$127,500 Last year's accruals$20,000 Last year's profit margin = PM20.0% Target payout ratio25.0%
asked
Feb 3, 2019
in
Business
by
tucke180
finance
Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions. Last year's sales = S0$300 Last year's accounts payable$50 Sales growth rate = g40% Last year's notes payable$15 Last year's total assets = A0*$500 Last year's accruals$20 Last year's profit margin = PM20% Initial payout ratio10%
asked
Feb 3, 2019
in
Business
by
llchch
finance
As a firm's sales grow, its current assets also tend to increase. For instance, as sales increase, the firm's inventories generally increase, and purchases of inventories result in more accounts payable. Thus, spontaneous liabilities that reduce AFN arise from transactions brought on by sales increases.
asked
Dec 29, 2019
in
Business
by
KenO1O
finance
Suppose a firm was planning to greatly reduce its raw materials inventory next year by introducing just-in-time inventory control procedures. Assuming no other changes to the firm's operations, what would this do to AFN?
asked
Sep 7, 2019
in
Business
by
Asiah
finance
If a firm has excess capacity when calculating AFN (Additional Funds Needed), A* will most likely equal which of the following?
asked
Sep 7, 2019
in
Business
by
Jeno32
finance
If a firm has excess capacity when calculating AFN (Additional Funds Needed), A* will most likely equal which of the following?
asked
Sep 4, 2019
in
Business
by
mckennatutay
finance
Suppose a firm was planning to greatly reduce its raw materials inventory next year by introducing just-in-time inventory control procedures. Assuming no other changes to the firm's operations, what would this do to AFN?
asked
Aug 22, 2019
in
Business
by
Abigail
finance
The AFN equation assumes that the ratios of assets and liabilities to sales remain constant over time. However, this assumption can be relaxed when we use the forecasted financial statement method. Three conditions where constant ratios cannot be assumed are economies of scale, lumpy assets, and excess capacity.
asked
Aug 11, 2019
in
Business
by
Steph
finance
You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning its operation for the coming year. The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.
asked
Aug 11, 2019
in
Business
by
Qdoolaydo
finance
A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase?
asked
Aug 11, 2019
in
Business
by
ahelms3188
finance
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