Ans. Definition of fund
fund simply means availability of cash in daily use
Definition of fund flow
flow of fund is just like circulation of blood . Like circulation of blood , fund flow should come in business and go from business.
flow of fund here means conversation of one asset to be use to purchase of another asset or use to deduction in liabilities .
Definition of fund flow statement
fund flow statement is a statement which shows source and use of fund in particular time. This period may be two years or more years .Basis of making fund flow statement is two years or more than two years balance sheet .
Procedure for preparing fund flow statement
For making fund flow statement , we took three steps
1st step
1 making shedule or statement of change working capital
2nd step
2 making adjusted profit and loss account or statement showing fund from operation or lost in operation
3rd Step
fund flow statement
shedule of changing working capital proforma
particular previous year current year increase working capital decrease in w/c
a b c d
current asst. Rs. 5000 Rs.10000 Rs 5000 ---
current liabilities 4000 5000 1000
Working capital
C.A-C.L. 1000 5000 5000 10000
Net increase in
working capital c-d =5000-1000 =4000
See adjusted profit and loss account in picture of my hand written notes
and see also fund flow statement
fund simply means availability of cash in daily use
Definition of fund flow
flow of fund is just like circulation of blood . Like circulation of blood , fund flow should come in business and go from business.
flow of fund here means conversation of one asset to be use to purchase of another asset or use to deduction in liabilities .
Definition of fund flow statement
fund flow statement is a statement which shows source and use of fund in particular time. This period may be two years or more years .Basis of making fund flow statement is two years or more than two years balance sheet .
Procedure for preparing fund flow statement
For making fund flow statement , we took three steps
1st step
1 making shedule or statement of change working capital
2nd step
2 making adjusted profit and loss account or statement showing fund from operation or lost in operation
3rd Step
fund flow statement
shedule of changing working capital proforma
particular previous year current year increase working capital decrease in w/c
a b c d
current asst. Rs. 5000 Rs.10000 Rs 5000 ---
current liabilities 4000 5000 1000
Working capital
C.A-C.L. 1000 5000 5000 10000
Net increase in
working capital c-d =5000-1000 =4000
See adjusted profit and loss account in picture of my hand written notes
and see also fund flow statement
