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what is difference cash flow and fund flow with example

what is difference cash flow and fund flow with example..

Answer / vikram batra

The statement of cash flows is part of the main group of financial statements that a business issues, though it is commonly considered to be third in importance after the income statement and balance sheet. The statement can be of considerable use in detecting movements of cash that are not readily apparent by perusing the income statement. For example, the income statement may reveal that a business earned a large profit, while the statement of cash flows shows that the same business actually lost cash while doing so (probably due to large investments in fixed assets or working capital). Thus, cash flow analysis is useful for determining the underlying health of a business.

The funds flow statement was required under GAAP from the period 1971 through 1987. The statement primarily reported changes in an entity's net working capital position between the beginning and end of an accounting period. Net working capital is an entity's current assets minus its current liabilities.

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