FUND FLOW

FUNDS : WORKING CAPITAL FLOW OF FUNDS: THE TERM FLOW MEANS CHANGE AND THEREFORE THE TERM FLOW OF FUNDS MEANS

CHANGES IN FUNDS OR CHANGES IN WORKING

CAPITAL. IN OTHER WORDS, ANY INCREASE OR

DECREASE IN WORKING CAPITAL MEANS FLOW OF

FUNDS.

FUNDS FLOW STATEMENT Funds flow statements is dealt by Accounting Standard 7 . . Meaning :- It explains changes in funds or changes in working capital . It explains the working capital position of the company which gives an idea to the top management about the liquidity position of the company. Working capital:- It is the difference between current assets and current liabilities. Steps in preparation of funds flow statement:1. Preparation of working capital statement that explains increase or decrease in working capital. 2. preparation of funds from operation statement in which we find out operating profit. 3. Preparation of funds flow statement that shows various sources and application of fund .

Current assets Cash in hand and bank Marketable investments Accounts receivables Stock Prepaid exp.

Fixed assets Goodwill Land and building Plant and machinery Long term investment

Current liabilities Bank overdraft Outstanding expenses Accounts payable

Fixed liabilities Share capital Reserve and surplus Debentures Long term loans

Flow in fund

Not flow in funds

USES OF FUNDS FLOW

WHY THE LIQUED POSITION OF THE BUSINESS BECOMING MORE AND MORE UNBALANCED IN SPITE OF COMPANY IS MAKING MORE AND MORE PROFITS. WHERE HAVE THE PROFIT GONE WHAT WILL BE THE SOURCES FOR DIVIDEND IF COMPANY IS NOT EARNING SUFFICIENT PROFIT WHAT ARE THE SOURCES OF REPAYMENT OF THE LOAN TAKEN HOW MUCH FUNDS GENERATION THROUGH NORMAL BUSINESS OPERATION. IN WHAT WAY THE MANAGEMENT HAS UTILIZED THE FUNDS IN THE PAST AND WHAT ARE GOING TO BE LIKELY USES OF FUNDS ?

FUNDS FLOW ANALYSIS

This statement is based on the working Capital concept of funds.

It measures the inflows and outflows of working capital resulting from different transactions.
Funds flow statement measures and presents in an analytical manner the summarized version of the numerous flows of funds for a specific period. Funds Flow is the change in Working Capital

Schedule Of Changes In Working Capital

Current assets Cash & bank bal. Investments Loans & adv. Bills receivables Total 2004 593.61 3404.4 9836.5 1522.9 15357 2005 555.36 2917.5 6696.6 302.3 10472 Increase 38.25 486.95 3139.9 1220.6 Decrease

Current liabilities
Other liabilities Short term borrowings Bills for collections Total CA - CL 1767.5 1881 4522.2 8170.7 7186.7 576.72 1236 4477.4 6290.1 4181.7 1190.75 645.02 44.85

Increase In Working Capital

TOTAL 7186.7

3005
7186.7 4885.6

3005.02
4885.64

CALCULATION OF FUNDS FROM OPERATION

Closing Balance Of P&L A/c (+) Non Fund Items Depreciation On Fixed Assets Transfer Of R/S 2.56 195.23 197.79 541.1 (-) NON FUND CR. NIL OPENING BAL. OF P&L A/C 321.03 343.31

FUNDS FROM OPERATION

220.07

Funds Flow Statement

SOURCES

AMT.

APPLICATION

AMT.

ISSUE OF CAPITAL FUNDS FROM OPERATION SALE OF FIXED ASSET LONG TERM LOANS BORROWINGS

49 Increase In WC 220.07 Investments 2.56 2253.02 966.37

3005.02 486

TOTAL

3491.02

3491.02

PRESENTED BY :

VIVEK JAISWAL