Funds flow statement is a method by which we study changes in financial position of a business enterprise between two accounting periods. It is prepared with the help of two balance sheets of an enterprise. Broadly speaking, preparation of funds flow statement involves two stages, namely – 1. Statement or schedule of changes in working capital 2. Statement of sources [...]
In this article we will discuss about:- 1. Introduction to Funds Flow Statement 2. Meaning and Definition of Funds Flow Statement 3. Concept of Flow of Funds 4. External Sources Include of Funds 5. Applications of Funds Flow. Contents: Introduction to Funds Flow Statement Meaning and Definition of Funds Flow Statement Concept of Flow of Funds External Sources Include of [...]
'Flow' means change. 'Funds' is interpreted as' working capital' in the context of funds flow statement. Thus, 'Funds flow' is 'change in working capital'. Flow of funds implies any changes in working capital. These changes are a continuous process, day after day, as and when transactions take place. So, the changes in working capital may be called 'Flow'. It can [...]