What are the 2 internal and 2 external sources of finance?
Internal sources of finance include Sale of Stock, Sale of Fixed Assets, Retained Earnings and Debt Collection. In contrast, external sources of finance include Financial Institutions, Loan from banks, Preference Shares, Debenture, Public Deposits, Lease financing, Commercial paper, Trade Credit, Factoring, etc.
Which of the following is not one of the factor of external finance?
Manufacturing is NOT an external factor since manufacturing is referred as an internal factor as it belongs within the complete control of the organization.
How do you calculate financial expenses?
Total Expenses = Net Revenue – Net Income.
How do you calculate external cost of equity?
Under this model, Cost of Equity = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return).
What is the formula for forecasting in Excel?
=FORECAST(x, known_y’s, known_x’s) The FORECAST function uses the following arguments: X (required argument) – This is a numeric x-value for which we want to forecast a new y-value. Known_y’s (required argument) – The dependent array or range of data.
What is a 3 way financial forecast model?
A three-way forecast, also known as the 3 financial statements is a financial model combining three key reports into one consolidated forecast. It links your Profit & Loss (income statement), balance sheet and cashflow projections together so you can forecast your future cash position and financial health.
What is the plug figure in external financing required?
The significance of the “plug” figure, external financing required is that it balances the financial statements in an easy and simplified manner. Differentiate between strategies associated with positive values and with negative values for external financing required.
What is the difference between EFN and AFN?
The difference between the right-hand-side and the left-hand-side of the statement at this stage is called “additional funds needed” (AFN) or external funds needed (EFN). If this number is positive, this means that the firm needs to raise money externally to support the firm’s growth.
What are the 3 measures of financial efficiency?
Efficiency ratios include the inventory turnover ratio, asset turnover ratio, and receivables turnover ratio. These ratios measure how efficiently a company uses its assets to generate revenues and its ability to manage those assets.
What does efn mean?
A company needs additional “capital” (i.e., financial resources) in order to grow and to maintain its existing plant and equipment, and to acquire additional inventory.
What is external financing debt?
External debt is the portion of a country’s debt that is borrowed from foreign lenders, including commercial banks, governments, or international financial institutions.
How do you calculate financing flow?
Cash flow from financing activities formula To calculate cash flow from financing activities, add your dividends paid to the repurchase of debt and equity, then subtract the total number from cash inflows from issuing equity or debt. These can also be found in a cash flow statement.
How do you calculate net external sales?
In profit and sales transactions, the net sales formula is relatively straightforward: net sales = gross sales – (return values + discount losses + sales taxes + allowances). To calculate net sales, subtract all the factors that go into sales beyond production from the total sales.
What are the top 4 forecasting methods?
While there are a wide range of frequently used quantitative budget forecasting tools, in this article we focus on four main methods: (1) straight-line, (2) moving average, (3) simple linear regression and (4) multiple linear regression.
What are the 3 forecasting techniques?
There are three basic types—qualitative techniques, time series analysis and projection, and causal models.
What are the five 5 steps of forecasting?
Step 1: Problem definition. Step 2: Gathering information. Step 3: Preliminary exploratory analysis. Step 4: Choosing and fitting models. Step 5: Using and evaluating a forecasting model.
What are the three techniques of financial planning used to estimate external financing needs?
Three of the most important techniques are horizontal analysis, vertical analysis, and ratio analysis.
How do you calculate additional funds needed?
The simplified formula is: AFN = Projected increase in assets – spontaneous increase in liabilities – any increase in retained earnings.
What is EFN in finance?
The amount of external financing (EFN), or money borrowed from a bank or investors, needed can be approximated with this formula: External Financing Needed (EFN) = Increase in Assets – Increase in Liabilities – Retained Income.
What does a negative EFN mean?
“When EFN (External Financing Needed, aka AFN) is negative, it indicates that the company is holding excessive money than that is needed. When company is merely holding the surplus of money is often as bad as holding the surplus of debt.