AFN
Find how much outside money a growth plan needs: sales of 500,000 growing 25%, assets of 300,000, spontaneous liabilities of 60,000, a 6% margin and a 40% payout leave a gap of 37,500. Every intermediate figure is shown too. Free in your browser.
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Worked example
- Current sales
- 500,000
- Total assets
- 300,000
- Spontaneous liabilities
- 60,000
- Profit margin
- 0.06
- Payout ratio
- 0.4
- Sales growth rate
- 0.25
- Afn
- 37,500
- Projected sales
- 625,000
- Sales increase
- 125,000
- Required asset increase
- 75,000
You provide current sales, total assets, spontaneous liabilities, the profit margin, the dividend payout ratio and the projected sales growth rate, and it returns the external financing required along with every intermediate figure — projected sales, the required increase in assets, the spontaneous increase in liabilities and the addition to retained earnings. One deterministic call, no spreadsheet required.
What additional funds needed really measures
Growth is not free. When sales rise, a company typically needs more inventory, more receivables and often more equipment, and those assets have to be paid for by somebody. Part of the bill is covered automatically: suppliers extend more credit as purchases grow, and accrued wages and taxes grow with the operation — these are the spontaneous liabilities.
Another part is covered from the inside, by the profit the enlarged operation earns and keeps instead of paying out as dividends. The additional funds needed figure is whatever is left over after those two internal sources are counted: the amount that must come from new bank debt, new bonds or new equity. A positive result means external financing is required; a negative result means the growth actually generates a financing surplus that can be used to pay down debt or fund distributions.
How the computation works
First, projected sales are computed as current sales times one plus the growth rate, and the increase in sales is the difference. Second, the required increase in assets is the current ratio of assets to sales multiplied by that increase, on the assumption that assets grow proportionally with sales; the spontaneous increase in liabilities is computed the same way from the liability-to-sales ratio. Third, the addition to retained earnings is the profit margin times projected sales times one minus the payout ratio — the earnings the coming period will keep.
AFN is then the required asset increase minus the spontaneous liability increase minus the retained earnings addition. All inputs and outputs are rounded to two decimals so results are byte-stable, and any non-finite or out-of-range input is rejected with an error that is never billed.
Reading the result and planning with it
The returned object is built for planning, not just for a single number. Alongside afn you get projected sales, the sales increase, the required asset increase, the spontaneous liabilities increase and the addition to retained earnings, so you can see exactly which term drives the financing gap. A company with a fat profit margin and a low payout ratio often finds that retained earnings cover most of moderate growth, while a thin-margin distributor may need a credit line for the same expansion.
The growth rate must be zero or positive — the model answers questions about expansion, not contraction, and a negative rate is rejected as invalid input. Use it in budgeting pipelines, lender-ready projections, board decks and sensitivity analyses: vary the growth rate across calls and watch how the financing gap widens or closes.
What you can do with it
Size a credit line before the year starts
Feed next year's sales growth plan into the AFN figure so the treasury team negotiates financing before the gap appears, not after.
Stress-test a growth scenario
Compare AFN across several growth rates to find the fastest expansion the company can fund from retained earnings and supplier credit alone.
Support a loan application
Attach the breakdown — asset increase, spontaneous liabilities, retained earnings — to a lender-ready projection instead of a single unexplained number.
FAQ
What happens if the sales growth rate is negative?
The AFN model answers expansion questions; failed requests are not billed.
What does a negative AFN result mean?
It means the growth generates more internal financing than it consumes: retained earnings plus spontaneous liabilities exceed the required asset increase, leaving a surplus.
Are the ratios percentages or fractions?
Fractions. A 6% profit margin is 0.06, a 40% payout ratio is 0.4 and 25% growth is 0.25.
Which liabilities count as spontaneous?
The ones that grow automatically with sales, typically accounts payable and accrued expenses. Bank loans and bonds are not spontaneous — they are exactly the external financing AFN measures.
Is any data stored?
No. The six numbers are processed and discarded; only the computed result is returned.
Related tools
For developers — API access
Everything on this page is available programmatically. This section is for teams who want to wire it into their own systems; everyone else can just use the tool above.
API endpoint
Prefer to automate it? One authenticated POST creates the task; the result comes back by webhook or a signed link. The same capability also runs here on the web, by email and from Telegram — and soon from our app too.
Call it from your stack
curl -X POST https://api.kit.forhosting.com/fin/afn \
-H "Authorization: Bearer $KIT_KEY" \
-H "Content-Type: application/json" \
-d '{"current_sales":500000,"total_assets":300000,"spontaneous_liabilities":60000,"profit_margin":0.06,"payout_ratio":0.4,"sales_growth_rate":0.25}'const res = await fetch("https://api.kit.forhosting.com/fin/afn", {
method: "POST",
headers: {
"Authorization": `Bearer ${process.env.KIT_KEY}`,
"Content-Type": "application/json"
},
body: JSON.stringify({
"current_sales": 500000,
"total_assets": 300000,
"spontaneous_liabilities": 60000,
"profit_margin": 0.06,
"payout_ratio": 0.4,
"sales_growth_rate": 0.25
})
});
const { task_id } = await res.json();import os, requests
res = requests.post(
"https://api.kit.forhosting.com/fin/afn",
headers={"Authorization": f"Bearer {os.environ['KIT_KEY']}"},
json={
"current_sales": 500000,
"total_assets": 300000,
"spontaneous_liabilities": 60000,
"profit_margin": 0.06,
"payout_ratio": 0.4,
"sales_growth_rate": 0.25
},
)
task_id = res.json()["task_id"]<?php
$res = file_get_contents("https://api.kit.forhosting.com/fin/afn", false, stream_context_create([
"http" => [
"method" => "POST",
"header" => "Authorization: Bearer " . getenv("KIT_KEY") . "\r\nContent-Type: application/json",
"content" => '{"current_sales":500000,"total_assets":300000,"spontaneous_liabilities":60000,"profit_margin":0.06,"payout_ratio":0.4,"sales_growth_rate":0.25}',
],
]));
$task = json_decode($res, true);body := bytes.NewBufferString(`{"current_sales":500000,"total_assets":300000,"spontaneous_liabilities":60000,"profit_margin":0.06,"payout_ratio":0.4,"sales_growth_rate":0.25}`)
req, _ := http.NewRequest("POST", "https://api.kit.forhosting.com/fin/afn", body)
req.Header.Set("Authorization", "Bearer "+os.Getenv("KIT_KEY"))
req.Header.Set("Content-Type", "application/json")
res, _ := http.DefaultClient.Do(req)Example request
{
"current_sales": 500000,
"total_assets": 300000,
"spontaneous_liabilities": 60000,
"profit_margin": 0.06,
"payout_ratio": 0.4,
"sales_growth_rate": 0.25
}Example response
{
"task_id": "tsk_a1b2c3d4e5f6a1b2c3d4e5f6",
"type": "fin.afn",
"status": "queued",
"_links": {
"result": "/tasks/tsk_…/result"
}
}The API is asynchronous: the call returns a task_id immediately and the result arrives by webhook. Polling is capped at 1 req/s per task.
Pricing
Published price — no tokens, no invented credits. A failed task is never charged.
Errors
| HTTP | Code | Meaning |
|---|---|---|
401 | unauthorized | Missing or invalid API key. |
402 | insufficient_balance | Your balance doesn't cover the task price. |
404 | unknown_type | That task type doesn't exist. |
429 | rate_limited | Too many requests. Use the webhook instead of polling. |
Technical notes
The additional funds needed (AFN) API answers the question every growth plan eventually hits: how much outside money will the company have to raise to pay for the growth it is projecting?
How the computation works
The endpoint applies the classic AFN formula in three deterministic steps.
Reading the result and planning with it
Automate it for $0.002 per request, or try it free in the browser on this page first.
Technical questions
What does it cost?
$0.002 per request. It is also free to run in your browser on this page.