Accounts Notes: What is the Cash flow and fund flow statement

Sunday 20 March 2011

What is the Cash flow and fund flow statement

Rules for preparing schedule of changes in working capital :-

Increase in a current asset, results in increase in working capital – so Add
Decrease in current asset, results in decrease in working capital – so Decrease
Increase in current liability, results in decrease in working capital – so Decrease
Decrease in current liability results in increase in working capital – so Add

Funds from operations – Format

Particulars Rs. Rs.
Net profit

Add : Depreciation
Goodwill written off
Preliminary Exp. Written off
Discount on share written off
Transfer to General Reserve
Provision for Taxation
Provision for Dividend
Loss on sale of asset
Loss on revaluation of asset Less : Profit on sale of asset
Profit on Revaluation of asset
Fund flow statement

Fund flow statement

Particulars Rs.
Sources of funds : -
Issue of shares
Issue of Debentures
Long term borrowings
Sale of fixed assets
Operating profit ***

Total Sources ***
Application of funds : -
Redumption of Redeemable preference shares
Redumption of Debentures
Payment of other long term loans
Purchase of Fixed assets
Operating Loss
Payment of dividends, tax etc ***

Total Uses ***
Net Increase / Decrease in working capital
(Total sources – Total uses)

Cash flow statement

Cash From Operation : -
= Net profit + Decrease in Current Asset
+ Increase in Current Liability
- Increase in Current Asset
- Decrease in Current Liability

Cash flow statement

Sources Rs. Application Rs.
Opening cash and bank balance
Issue of shares
Raising of long term loans
Sales of fixed assets
Short term Borrowings
Cash Inflow
Closing Bank O/D
Opening Bank O/D
Redumption of Preference Shares
Redumption of Long term loans
Purchase of fixed assets
Decrease in Deferred payment Liability
Cash Outflow
Tax paid
Dividend paid
Decrease in Unsecured loans, Deposits
Closing cash and bank balance