Explain the steps in preparing funds flow statement?

Answer 1

the cash flow statement is divided into 3 sections 1) cash from operating activity- here cash comes from the actual operation of the business liken ( profit after tax+ depreciation+ amortization+ changes in working capital) How to calculate: Net Income +depreciation/depletion/amortization expense +loss on sale of long term Assets -gain on sale of long term assets -increases in current assets +decreases in current assets +increases in current liabilities -decreases in current liabilites =net cash provided by operating activities 2) cash from investing activity- here the cash is generated or used up like making investments such buying of fixed assets Sales of long term assets (land, building, equipment, etc.) -purchases of long term assets +collections of Notes receivable -loans to others =Net cash provided by investing activities 3) cash from financing activity- here the cash is gererated or used up in dealing in financing activity such as like interest charges or payment of principal Issuance of stock +sale of treasury stock -purchase of treasury stock +borrowing (issuance of note receivable or bond payable) -payment of notes or bonds payable -payment of dividends =net cash provided by financing activities the result of all the activity will inform us the total cash gererated or used up in a period for which a cash flow statement is prepared then this cash balance is added up to opening balance which will give us the closing balance of cash for the period use a search engine.If you want to prepare daily cash flow which most of enterpreneur should do, you can refer to www.bestcashmanagement.com where a comprehensive tutorial for every one to follow plus Excel template that will make us easier to prepare.

Answer 2

A cash flow statement is basically a statement that explains how the cash will be flowing in to a company. For example considering construction industry the initial investment will be done by the contractor to begin with the project. As project progresses the number of activities that he will be doing in parallel will be more. Hence if a project is having a duration of a year or two, then the month wise amount spending for the activities to be carried out during that month has to be calculated over the entire period of the project. The cash flow for a typical construction industry or any other industry will be a S Curve. A S-Curve distributed evenly over the period of the project is preferable. Now in order to map the progress of the actual work

as against initial cash flow, just super pose this on to the original S-Curve. If the actual curve is below the original S-Curve then it indicates that the progress of work is below the original, and if it is above then it denotes that the progress is good and healthy.

Answer 3

find funds flow statement & schedule of changes in working capital: liabilities assets equity share capital 240000 360000 land&building 166200 339600 share premium 24000 36000 machinery 106800 153900 general reserve 18000 27000 furniture 7200 4500 p&La/c 58500 62400 stock 66300 78000 8%debentures -------- 78000 debtors 109500 117300 taxation provision 29400 32700 bank 14400 12000 creditors 100500 109200 ---- 470400 705300 470400 705300 ---- depriciation written off during the year: on machinery Rs 38400 on furniture Rs 1200

Answer 4

In business accounting and financial accounting found flow is a part of statement of steps ,example in any organization,company,school,authorised center their people uses of this statement but depends on whats type he used.

By NR Khan

Answer 5

The only difference between direct or indirect method is in preparing cash flow from operating activities. in direct method following items are used to calculate cash flow from operations:

• Cash collected from customers
• Interest and dividends received
• Cash paid to employees
• Cash paid to suppliers
• Interest paid
• Income taxes paid