Unbelievable Fund Flow Statement Notes

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Fund flow statement notes. Fund flow is the financial statements part where enterprises fund expenses during the accounting period. To summarize Fund flow statement is considered as an important tool for financial analysis and control. It portrays the inflow and outflow of funds ie.

Funds flow statement has to be used along with balance sheet and profit and loss account it cannot be used alone. It helps the company see through where their money has been spent and from where they have received the money long-term funds raised by issues. Statement of Sources and Application of Funds.

It acts as an important instrument for allocation of resources of a concern. A funds flow statement is based on the accrual accounting system and does not provide explanation as to transactions affecting the cash or cash equivalents. In other words it compares the source of inflow and outflow of funds during the concerned accounting period and analyses how it affects the working capital of an organization.

A Projected Cash Flow Statement or a Cash Budget will help the management in ascertaining how much cash will be available to meet obligations to trade creditors to pay bank loans and to pay dividend to the shareholders. A fund flow statement is a statement prepared to analyse the reasons for changes in the financial position of a company between two balance sheets. A funds flow statement fails to give reasons for excess or shortage of cash and cash equivalents.

It does not reveal the cash position of the company and that is why company has to prepare cash flow statement in addition to funds flow statement. Fund Flow Statement acts as an important tool for financial analysis and shows the brief reasons for change in the Working Capital between two Balance Sheet dates. A Funds Flow Statement is a financial document that analyses a companys Balance Sheet of two years to validate the movement of funds from the previous financial year to the current year.

Fund flow statement is a statement which shows the sources and uses of funds for a period of time. In this way the fund flow statement implies a method of analysing the changes in the firms financial position between. Fund Flow Statement explains how the financial position has changed from the beginning of an accounting period to the end of that period.