Sources and Uses of Funds Analysis

1
Sources and Uses ofFunds Analysis

• (Comparative Balance Sheet Analysis)

2
Sources of Funds

• Decrease in an asset account
• Example, reduction in inventory
• Increase in a liability account
• Example, increase in accounts payable

3
Uses of Funds

• Increase in an asset account
• Example, increase in A/R
• Decrease in a liability account
• Example, decrease in bonds

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Sources Uses of Funds
Increase Decrease
Assets
Liabilities
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Sources Uses of Funds
Increase Decrease
Assets Use Source
Liabilities
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Sources Uses of Funds
Increase Decrease
Assets Use Source
Liabilities Source Use
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Sources Uses of FundsComparative Balance
Sheet Analysis
Item Date (2010) Date (2009) Amount 10 09 Sources of Funds Uses of Funds



8
Sources Uses of FundsComparative Balance
Sheet Analysis
Item Date (2010) Date (2009) Amount 10 09 Sources of Funds Uses of Funds
Cash 1,000 900 100 100


9
Sources Uses of FundsComparative Balance
Sheet Analysis
Item Date (2010) Date (2009) Amount 10 09 Sources of Funds Uses of Funds
Cash 1,000 900 100 100
A/R 2,000 2,500 -500 500

10
Sources Uses of FundsComparative Balance
Sheet Analysis
Item Date (2010) Date (2009) Amount 10 09 Sources of Funds Uses of Funds
Cash 1,000 900 100 100
A/R 2,000 2,500 -500 500
Bonds 3,000 3,800 -800 800