Fun Difference Between Cash Flow Analysis And Fund Flow Analysis
It is ended with closing cash in hand and cash equivalents.
Difference between cash flow analysis and fund flow analysis. The primary difference between the two is that money available in physical form as a currency is termed as cash while funds concern all the financial resources in their entirety. Tweet The main differences are as follows. Cash flow refers to the current format for reporting the inflows and outflows of cash while funds flow refers to an outmoded format for reporting a subset of the same information.
1 A cash flow statement is concerned only with the change in cash position while a fund flow analysisstatement is concerned the change in working capital position 2 Cash is part of working capital and an improvement in cash position results in improvement in funds position but the. Cash flow is derived from the statement of cash flows. Funds flow statement is in consonant with the actual basis of.
It is ended with either increase in working capital or decrease in working capital. Cash flow is the net amount of cash being transferred into and out of a company. Making a statement for cash flow is beneficial for short term analysis of finances while making a statement for fund flow is beneficial for long term analysis of finances.
Cash flow is based on a narrow concept called cash Fund flow is based on a wider concept called working capital Usefulness. The reasons for the change in cash are known through cash flow statement. When making a statement for cash flow it will include all opening and closing balances of cash and cash-like assets.
Thus the difference between cash flow and fund flow highlights the conceptual limit of cash and a broader inclusion for funds. It is started with funds from operation or funds lost in operation. Funds flow analysis Fund flow is the net of all cash inflows and outflows in and out of various financial assets.
Cash flow statement contains opening and closing balances of cash and cash equivalents. A cash flow statement is concerned only with the change in cash position while a funds flow analysis is concerned with changed in working capital position between two balance sheet dates. The utility of the cash flow statement is to find out the net cash flow.