Accounting For Managers - Funds Flow Analysis And Cash Flow Analysis
Introduction of Funds Flow Analysis And Cash Flow Analysis
At the end of each accounting period, preparation and presentation of financial statements are undertaken with an objective of providing as much information as possible for the public.
The balance sheet presents a snapshot picture of the
financial position at a given point of time and the income statement shows a
summary of revenues and expenses during the accounting period. Though these are
significant statements especially in terms of the principal goals of the
enterprise, yet there is a need for one more statement which will indicate the
changes and movement of funds between two balance sheet dates which are not
clearly mirrored in the balance sheet and income statement. That statement is
called as funds flow statement. The analysis which studies the flow and
movement of funds is called as funds flow analysis. Similarly one more
statement has to be prepared known as cash flow statement. This requires the
doing of cash flow analysis. The focus of cash flow analysis is to study the
movement and flow of cash during the accounting period. This lesson deals at
length both the analyses.
ՖՖ After reading this lesson, the reader should be able to
ՖՖ
understand
the concept of funds and flow.
ՖՖ
evaluate
the changes in working capital in an organization.
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ascertain
the sources and uses of funds from a given financial
ՖՖ
statement.
ՖՖ
prepare
fund flow statement.
ՖՖ
understand
the concepts of cash and cash flow.
ՖՖ
understand
the cash flow analysis.
ՖՖ
prepare
cash flow statement.
Contents
1 Concept Of Funds
2. Flow Of Funds
3 Importance And Utility Of
Funds Flow Analysis
4 Preparation Of Funds Flow
Statement
5 Illustrations
6 Meaning Of Concepts Of Cash, Cash Flow And Cash Flow Analysis
7 Cash Flow Statement
8 Calculation Of Cash From
Operations
9 Utility Of Cash Flow
Analysis
10 Cash Flow Analysis Vs.
Funds Flow Analysis
11 Illustrations
12 Summary
13 Case Analysis
