AFN Additional Funds Needed

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When to arrange additional funds

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  • 1. AFN(Additional Funds Needed)Presented bySyed Faraz Rizvi

2. The Formula Method for ForecastingAFN(Additional Funds Needed)Forecasting is the iterative process both in way FinancialStatements are generated & Financial plan is developed.First Construct Pro forma Income Statement & BalanceSheet. 3. The Formula Method for Forecasting AFNThe AFN FormulaThis formula can be used to initial rough estimate offinancial requirements: 4. The Formula Method for Forecasting AFNThe AFN Formula defined as: 5. The Formula Method for Forecasting AFN 6. The Formula Method for Forecasting AFN 7. Inserting values, we find additional funds needed to be $118 millionThe Formula Method for Forecasting AFN 8. Raise the Additional Funds NeededThe Formula Method for Forecasting AFN 9. Relationship Between Growth & Financial Requirements:The Formula Method for Forecasting AFNFinancial Feasibility:Effect of dividend policy on financing needs. 10. Forecasting Financial Requirements When theBalance Sheet Ratios are Subject to ChangeEconomies of ScaleLumpy AssetsNo optimal Startingpoint RatiosThe Formula Method for Forecasting AFN 11. The Formula Method for Forecasting AFN 12. Excess Capacity Adjustments:The Formula Method for Forecasting AFN 13. The Formula Method for Forecasting AFN 14. The ENDThank you