Calculation Of Funds From Operations-Illustration

Note: provision for income-tax and proposed dividend are taken as current liabilities. Hence they are not added here. They will be taken to schedule of

Changes in working capital.

Ii. Fixed Assets: from a perusal of schedule relating to `fixed assets’ in the annual report, it is ascertained that there was a sale of 

fixed assets amounting to rs.16,62,000 and purchase of fixed assets to the tune of rs.38,54,000. These will be shown as source and application of funds respectively. (in examination problems information about, sale and purchase of assets can be ascertained by preparing respective asset accounts).

Iii. Investments:

A similar perusal of schedule relating to `investments’ gives information that there was a redemption of investment amounting to rs.5,000 which is a source of fund.

Now the schedule of changes in working capital and funds flow

Statement are prepared.