As a firm's sales grow, its current assets also tend to increase.For instance, as sales increase, the firm's inventories generally increase, and purchases of inventories result in more accounts payable.Thus, spontaneous liabilities that reduce AFN arise from transactions brought on by sales increases.

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As sales increase, current assets such as inventories and accounts payable tend to increase as well, resulting in spontaneous liabilities that reduce the need for additional funding (AFN).

As a Firm's Sales Grow, Its Current Assets Also Tend