Exam 9: Forecasting

FMarston, Inchas developed a forecasting model to estimate its AFN for the upcoming year All else being equal, which of the following factors is most likely to lead to an increase of the additional funds needed (AFN)?

a firm wants to maintain its ratios at their existing levels, then if it has a positive sales growth rate of any amount, it will require some amount of external funding.

Firms pay a low interest rate on spontaneous liabilities so these funds are its cheapest source of capital Consequently, the firm should make arrangements with its suppliers to use as much of this credit as possible.