# Additional Funds Needed Calculator

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## What is the Additional Funds Needed Calculator?

The Additional Funds Needed (AFN) Calculator is a financial tool used to estimate the amount of funding required for a business to achieve its projected growth. It calculates the difference between the required assets and liabilities to determine the additional funds needed for a business to finance its expansion.

**The Formula**

**AFN=IA−IL−IRE**

where:

- IA is the increase in assets
- IL is the increase in liabilities
- IRE is the increase in retained earnings

**How to Calculate**

To use the AFN Calculator, you need to input the increase in assets, increase in liabilities, and increase in retained earnings into the provided form. The calculator will then use the formula above to calculate the additional funds needed.

**Example**

Suppose a business plans to increase its assets by $100,000, increase its liabilities by $50,000, and increase its retained earnings by $30,000. Using the AFN formula, we can calculate the additional funds needed as follows:

AFN = IA – IL – IRE AFN = $100,000 – $50,000 – $30,000 AFN = $20,000

Therefore, the business will need an additional $20,000 to finance its projected growth.

**FAQs**

**What is the significance of the AFN Calculator?**

The AFN Calculator is significant in that it helps businesses to determine the amount of funding they require for expansion.

**How accurate is the AFN Calculator?**

The accuracy of the AFN Calculator depends on the accuracy of the input values.

**Can the AFN formula be used for personal financial planning?**

The AFN formula is designed for business financial planning and may not be suitable for personal financial planning.

**In Conclusion**

The Additional Funds Needed (AFN) Calculator is a financial tool that helps businesses estimate the additional funds required to achieve their projected growth. The formula used by the calculator is AFN=IA−IL−IRE, where IA is the increase in assets, IL is the increase in liabilities, and IRE is the increase in retained earnings. The accuracy of the AFN Calculator depends on the accuracy of the input values.