Tag Archives | External Funds Requirement (EFR) of a Firm

EFR is calculated with the help of following formula, when other ratios remain constant: Where, A/S = Total assets/Sales L/S = Current liabilities and provisions/Sales ∆S = Expected increase in sales over current year (S-S1) S = Sales of current year S1 = Projected sales of next year D = Dividend payout ratio M = Net profit margin The expected [...]

EFR is calculated with the help of following formula, when other ratios remain constant: Where, A/S = Total assets/Sales Total assets include both current assets and fixed assets L/S = Current liabilities and provisions/Sales S = Sales of current year S1 = Projected sales of next year ΔS = Expected increase in sales over current year (S-S1) M = Net [...]