Financial position of the company
Fund flow Statement helps to measure the different sources of funds. Funds Flow Statement analyses the Sources and Application of Funds while others don't.
funds statement
To understand the position of the group as a whole and also the inter flow of funds between parent and subsidiary companies.
A funds flow statement compares a company's actual cash flow with its predicted cash flow. This allows a company to examine the factors that may have caused a failure to meet goals.
A distinction between these two statements may be briefed asFunds Flow Statement is concerned with all items constituting funds (Working Capital)for the business while Cash Flow Statement deals only with cash transactions. In other words, a transaction affecting working capital other than cash will affect Funds statement, and not the Cash Flow Statement.In Funds Flow Statement, net increase or decrease in working capital is recorded while in Cash Flow Statement, individual item involving cash is taken into account.Funds Flow statement is started with the opening cash balance and closed with the closing cash balance records only cash transactions.Cash Flow Statement is started with the opening cash balance and closed with ht closing cash balance while there a no opening or closing balances in Funds Flow Statement.
managerial uses of fund flow analysis
The purpose of accounting is provide information to the users like investors ,financial institutions and to other clients. The four basic financial statements are balance sheet,income statement,cash flow,statement of retained earning.
This statement gives an overview of how I plan to manage the finances of each year.
It is the statement of change in financial position, prepared to determine only source and uses of working capital between date of to balance sheet.
when working capital decreases it should be written under the head SOURCES OF FUNDS in fund flow statement. and when W/C increases it should be written under APPLICATION OF FUNDS.
Budgeted cash flow statement is the estimated cash flow statement for planning purpose before the actual activity starts
Uses Of Fund Flow Statement1. The users of fund flow statement, such as investors, creditors, bankers, government, etc., can understand the managerial decisions regarding dividend distribution, utilization of funds and earning capacity with the help of fund flow statement. 2. The quantum of working capital is revealed by the schedule of working capital changes, which is a part of fund flow statement.3. The fund flow statement is the best and first source for judging the repaying capacity of an enterprise.4. The management will be able to detect surplus/shortage of fund balance.5. The fund from operation is not mentioned in the profit and loss account and balance sheet but it is separately calculated for the purpose of fund flow statement.