Meaning

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FUNDS FLOW
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WHAT IS FUNDS FLOW STATMENT

• FUNDS WORKING CAPITAL
• FLOW OF FUNDS THE TERM FLOW MEANS CHANGE
  AND THEREFORE THE TERM FLOW OF FUNDS MEANS
  CHANGES IN FUNDS OR CHANGES IN WORKING
  CAPITAL. IN OTHER WORDS, ANY INCREASE OR
  DECREASE IN WORKING CAPITAL MEANS FLOW OF FUNDS.

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Current assets Cash in hand and bank Marketable
investments Accounts receivables Stock Prepaid
exp.
Fixed assets Goodwill Land and building Plant and
machinery Long term investment
Current liabilities Bank overdraft Outstanding
expenses Accounts payable
Fixed liabilities Share capital Reserve and
surplus Debentures Long term loans
Flow in fund
Not flow in funds
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USES OF FUNDS FLOW

• WHY THE LIQUED POSITION OF THE BUSINESS BECOMING
  MORE AND MORE UNBALANCED IN SPITE OF COMPANY IS
  MAKING MORE AND MORE PROFITS.
• WHERE HAVE THE PROFIT GONE
• WHAT WILL BE THE SOURCES FOR DIVIDEND IF COMPANY
  IS NOT EARNING SUFFICIENT PROFIT
• WHAT ARE THE SOURCES OF REPAYMENT OF THE LOAN
  TAKEN
• HOW MUCH FUNDS GENERATION THROUGH NORMAL BUSINESS
  OPERATION.

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• IN WHAT WAY THE MANAGEMENT HAS UTILIZED THE FUNDS
  IN THE PAST AND WHAT ARE GOING TO BE LIKELY USES
  OF FUNDS ?

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Funds flow Analysis

• This statement is based on the working Capital
  concept of funds.
• It measures the inflows and outflows of working
  capital resulting from different transactions.
• Funds flow statement measures and presents in an
  analytical manner the summarized version of the
  numerous flows of funds for a specific period.
• Funds Flow is the change in Working Capital

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Schedule Of Changes In Working Capital
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CALCULATION OF FUNDS FROM OPERATION
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Funds Flow Statement
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Cash Flow Analysis

• Cash flow includes cash inflows and outflows
  cash receipts and cash payments during a period.
• A cash flow statement is a statement which
  portrays the changes in cash position between two
  accounting periods.
• It helps in taking short term financial decisions
  and also in the preparation of cash budget for
  the next year.

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How Cash Flow Differ From funds Flow ?

• Unlike funds flow Cash Flow does not has non-cash
  items.
• It comprises only those entries in which cash has
  come in or gone out.

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Statement Of Cash From Operations
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Cash Flow Statement