The term additional funds needed (AFN) is generally defined as follows:

• A. The amount of internally generated cash in a given year minus the amount of cash needed to acquire the new assets needed to support growth.
• B. Funds that are obtained automatically from routine business transactions.
• C. Funds that a firm must raise externally from non-spontaneous sources, i.e., by borrowing or by selling new stock, to support operations.
• D. The amount of assets required per dollar of sales.
• E. A forecasting approach in which the forecasted percentage of sales for each balance sheet account is held constant.