Cash Flow Statement : Statement showing changes in inflow &
outflow of cash during the period.
Methods of cash flow:1.Direct Method : presenting
information in:Statement of A. operating Activities, B.
Investment Activities C.Financial Activities
2.Indirect Method :uses net income as base & make
adjustments to that income(cash & non-cash)transactions.
Funds Flow Statement :Statement showing the sorce &
application of funds during the period.
Major Difference:
The CFS allows investors to understand how a company's
operations are running, where its money is coming from, and
how it is being spent.
FFS is showing the fund for the future activites of the
Company.
CMA Kiran
Cash flow is nothing but flow of cash during a particular
period of time. It is a strong Analysis tools used by Large
and medium scale companies to make Analysis of Inflow and
Outflow of money during a particular period of time. Now a
days even small scale industries are using this tools.
Fund Flow shows the flow of money from different Activities.
This helps the management to make analysis of the FLow of
funds from activities such as Operating Activites,
Investment Activities, Financing Activities etc.,.
Cash flow is the inflow & outflow of cash during an
accounting period.
fund flow statment is a report which explains the movement
of funds, during an accounting period.
difference:
shows the causes of changes in net working capital. there
are no opening or closing balances. deals with all
components of working capital.
shows the causes for the changes in cash.started with the
opening and closing balances of cash. deals only with cash.
methods:
operating activities.
investing activities.
financing activities.
cash flow statement is a statement of changes in csah
position.it is a prepare on cash basis,in other hand it is
a statement of inflow outflow cash during specipic
period,fund means net working capital.nwc=c.a-c.l,fund flow
statement is a statement of changes in financial
position,it is prepare on working capital.
methods
statement
t-form,account form
Cash flow simply means a factual presentation of cash
inflows and outflows.This will give a clear picture of cash
and cash equivalents movement during a period of time. On
the other side fund flow is broader term which never
confine to cash movemnts only but this will show the
sources & application of funds and its movements over a
period of time.The major key aspect of fund flow is its
working capital presentation.Business operations can
easily be analysed through pointing out the movements of
working capital.The key decisions of management which
affect capital structure can be planned by utilising data
presented in fund flow statement through making a
comparison of working and fixed capital which will enable
progessive growth in prospective environment.
Cash flow statement is one of the tool for cash mgt it shows
cash inflows and out flows of a firm during the period.
cash flow statement may be defined it is statement which
summarise sources of cash inflows and uses of cash outflows
of a firm.
according to sebi guidelines are listed co's have to be
presented their cash flow statement in the annual report of
the co.
cash flow statement will prerpare in 3 types of methods
-- netprofit before tax & extraordinary items
-- cash from trading operations.
-- cash flow statement.
Cash flow statement is only concerned with cash generated
activities.
while fund flow statement shows actual position of business
(i.e. Net working position of the business) that shows how
sources arises of funds and how applications on funds are
made there on.
1) Cash flow is a statement which shows cash inflow and
outflow of cash during a particular period of time. Where
as funds flow is a statement which shows inflow and outflow
of funds.
2) Cash flow shows the liquidity of the company, where as
funds flow shows how the company can invest in future.
Cash flow statement shows the actual cash flow of a
company. This summarrise the data of cash or cash related
activities only.
funds flow statements shows that where the funds have been
generated & where they have been utilised. thus funds means
current assets & currents liabilities of a company.If
current assets are more that current liabilities that
working capital of a company willbe increased & if current
liabilities are more that current Assets it will be
decrease.thus fund flow shows the reason of change in
working capital.
this is a statement of sources & uses of application of
funds.the sources are funds from operation,sale of fixed
assets,issue of share capital & debenture,non operating
receipts. Uses are purchase of fixed assets,redemption of
prefence shares & Debentures,Loss on sale of fixed
assets,loss from operations etc.
Waht is Funds Flow Statement?
Funds flow statement refers where got & where gone the
funds. Funds flow statement showing sourse of funds &
application of funds and showing differance between all
current assets & current liabilities.
Example, Funds from Business Operation, Long Term Loans and
Sale of Fixed Assets.
Cash flow stayement is preapred on regular basis which
gives the details of cash receipts and expenses i.e.,
payments incurred on daily basis to run the busines.
Funds flow statment is preapred on monthly basis which a
broad idea to the management the sorce and quatum of funds
put to used in business and the funds invested.
the difference between the both statement is Cash flow
statement will give idea about the expenses need on day to
day basis and Funds flow statement give the managment how
healthy is the business going.
Cash flow statement is showing receipts and payments for
during the period.
Where as funds flow is sources and application of funds,
ie. is increasing/decreasing net working capital.
cash flows shows from where the cash has been genarated and
where it has been applied.
The basic difference between cash flow and fund flow is
cash flows indicates the flows of cash, on the other hand
fund flow shows the flows of funds including cash fows.
So we can say that fund flow is the integration of
cash ,fund flows,& cash flow is the differentiation of fund
flow.
A distinction between these two statements may be briefed
as under:-
(i) Funds 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.
(ii) 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.
(iii) Funds Flow statement is started with the opening cash
balance and closed with the closing cash balance records
only cash transactions.
(iv) 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
Cash Flow Statement : Statement showing changes in inflow &
outflow of cash during the period.
Methods of cash flow:
1.Direct Method : presenting information in Statement of
A. operating Activities
B. Investment Activities
C.Financial Activities
2.Indirect Method :uses net income as base & make
adjustments to that income(cash & non-cash)transactions.
Funds Flow Statement :Statement showing the source &
application of funds during the period.
Major Difference:
The Cash Flow S tatement allows investors to understand how
a company's operations are running, where its money is
coming from, and how it is being spent.
Fund Flow Statement is showing the fund for the future
activites of the Company
Fundflow is a statement which discribe the financial
streanth and Weakness of the company whereas cash flow
statements discribe the movements of cash during the
financial year also describe liqudity position of the
company.
cash flow of a firm is the amount of cash on which a company
can perform its normal activities.
while fund flow is base on the working capital of the firm.
In 1988 fund flow is discarded from the daily practice. now
cash flow is the only practice is in use.
1.fund flow statement is prepared on the accrual basis of
accounting(i.e weather cash realized or not )where as in
cash flow statement data is obtained in accrual basis are
converted into cash basis.
2. funds flow statement checks and tallies the funds raised
from various sources and uses or applications of those funds
in a given period of time.cash flow statement reconciles the
opening bal. of cash with the closing bal. of cash by
proceeding through cash flows from operating ,investing and
financing activities .
3.fund flow statement is a broader concept which is based on
the working capital ,where as cash flow statement is based
on the flow of cash which is one of the element of working
capital .
Q. what is the cash flow statemnet and fund flow statement
A. cash folw statement are showing all inflow and outflow
of an company or firms during the period
fund flow statement are showing resources and
application of the fund that is the show accurate position
of an firms. cahs and fund flow statemet is the concern
with financial activity and both are depend upon
balancesheet of the end of the financial years
cash flow statement show only inflow and outflow of the
company
when fund flow statemnet show all activity of the an
company
so that is the lot of difference between cash flow
statement and fund flow statement
this is the according my opinion
fund flow statement shows increases or decrease working
capital for a period while cash flow show cash transaction
in which where we receipt cash and where we spend this
2 cash flow is relating only short time and fund flow
relating to long time
cash flow: the basic purbose of cash flow is to provide
infomation about the cash recipt and cash payment of a
business entity during the accounting period.
in adition,the statement is indent to provide information
about the investing and financing activities of the company
during period.
meaning of cash flow:
its a statement which reflects source
and uses of cash.
scope:
its limite statement is based on the narrow concept
of fund
components: cash is an important factor and its part of
working capital.
object:
its prepared to disclose only changes in cash
position.
no of stages: under cash flow statement, only one statement
is prepared.
opening and closing balance of cash:
in this statement cash
balance is shown(opening and closing)
uses: the cash flow statement is in financial analysis and
cash planning
fund flow statement:
fund flow is that reflect changes in
the working capital or fund.
scope:
the fund is broaded term. it is wider concept of fund.
component:
the fund or working capital includes cash,stock,
deptors,bills and temporary investment.
object:
fund flow statement is prepared to depict the changes
in working capital between two balance sheet dates.
no of statements;
two statements are prepared 1.working
capital changes
2.statement of source and uses of fund.
opening and closing of fund:
there is no place for showing
opening and closing balance of cash and fund flow statement.
uses:
in mid-term and long-term planning,fund flow
statement is useful.
CASH FLOW STATEMENT: It is a statement which depicts the
change in the cash position (i.e cash and bank balance) of
a concern between one balance sheet and another.
FUND FLOW STATEMENT: It is a statement which shows how the
net working fund or working capital is obtained and how it
is put to use.
DIFFERENCES BETWEEN CASH FLOW STATEMENT AND FUND FLOW
STATEMENT ARE AS FOLLOWS:
1.Cash Flow statement is based on cash concept of fund
whereas Fund Flow statement is based on working capital
concept of fund.
2.Cash Flow statement depicts the changes in the cash
position of an enterprise between two balance sheet periods
whereas Fund Flow statement depicts the changes in the
working capital position of an enterprise between two
balance sheet periods.
3.Cash Flow statement deals with the inflow and outflow of
only cash, which is just one of the items of working
capital whereas Fund Flow statement deals with all the
items of working capital.
4.Cash Flow statement is only a supplementary statement
whereas Fund Flow statement is a main statement.
5.Cash Flow statement starts with the opening cash balance
and ends with closing cash balance whereas Fund Flow
statement does not start with any opening balance and does
not end with any closing balance.
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