Well in this link I get the EFN definition that I know of, with the spontaneous liabilities term included. I'm trying to derive the Sustainable Growth Rate for a corporation, from this definition of EFN.
How does one calculate the liabilities-that-change-directly-with-sales term, using just previous year's sales (S), total assets(A), total debt(D), total equity(E), projected growth in sales(g), profit margin(PM) and retention ratio(b) as variables?
I found this link(page 11-12) that does the required derivation, but I don't understand the reasoning...
Any help would be appreciated.