What is the difference between cash flow statement and fund flow statement?
From a balance sheet financer is always prepare this statement, why should we prepare for that? What exactly we come to know from this statement.
Cash Flow Statement : Statement showing changes in inflow & outflow of cash during the period.
Methods of cash flow:
1.Direct Method : presenting information in Statement of
A. operating Activities
B. Investment Activities
C.Financial Activities
2.Indirect Method :uses net income as base & make
adjustments to that income(cash & non-cash)transactions.
Funds Flow Statement :Statement showing the source &
application of funds during the period.
Major Difference:
The Cash Flow S tatement allows investors to understand how a company’s operations are running, where its money is coming from, and how it is being spent.
Fund Flow Statement is showing the fund for the future activites of the Company.
June 30th, 2009 at 3:16 am
Cash Flow Statement : Statement showing changes in inflow & outflow of cash during the period.
Methods of cash flow:
1.Direct Method : presenting information in Statement of
A. operating Activities
B. Investment Activities
C.Financial Activities
2.Indirect Method :uses net income as base & make
adjustments to that income(cash & non-cash)transactions.
Funds Flow Statement :Statement showing the source &
application of funds during the period.
Major Difference:
The Cash Flow S tatement allows investors to understand how a company’s operations are running, where its money is coming from, and how it is being spent.
Fund Flow Statement is showing the fund for the future activites of the Company.
References :
June 30th, 2009 at 3:27 am
In cash flow: we see how the cash comes and where it goes.
In Funds Flow: The input of Funds in all the shapes and disposal of the same is done.
The entries from here are important part of Statement of Income and Balance Sheet
References :
June 30th, 2009 at 3:47 am
Fund flow statement analyses the sources and application of funds of long term nature and the changes in working capital. It tallies funds generated from various sources with various uses to which they are put. It is based on accrual accounting system and very useful for long range financial planning.
Cash flow statement is prepared from the transactions affecting cash and cash equivalents only. Taking in to account all sources and uses of cash, it starts with the opening balance of cash and cash equivalents and reaches the closing balance of cash and cash equivalents,. Cash flow statements are useful to identify the current liquidity problems which are to be corrected.
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