Cash flow refers to the overall cash generated by the firm in a specific accounting period and is calculated as the sum total of cash from operations cash flow from financing and cash flow from investing activities whereas the fund flow of the company records movement of the cash in and cash out from the company during the specified period of time. While both cash flow and fund flow are a part of financial accounting the latter focuses on the net movement of funds both inflows and outflows. Similarly one more statement has to be prepared known as cash flow statement. It is systematic use of ratio to interpretthe financial statements so that the strength and weaknesses of a firm isdetermined. It has become a useful tool in their analytical kit. Funds flow statements report changes in a businesss working capital from its operations in a single time period but have largely been superseded by cash flow statements. A projected cash flow statement is more of a toll for the control and monitoring of finances of a business. The performance of an asset or fund is not taken into account only share redemptions or outflows and share purchases or inflows. Cash flow and Fund flow are two different statements that have a varied scope and serve a different purpose in a business. A companys cash flow and fund flow statements reflect two different variables during a specific period of time.
The concept of Cash Flow and Fund Flow is fundamental to the discipline of accounting.
But in cash flow statement the data obtained on accrued basis is converted into cash basis. This requires the doing of cash flow analysis. The difference between cash flow and fund flow is evident in accounting. The cash flow will record a companys inflow and. Cash flow and Fund flow are two different statements that have a varied scope and serve a different purpose in a business. But in cash flow statement the data obtained on accrued basis is converted into cash basis.
A projected cash flow statement is more of a toll for the control and monitoring of finances of a business. A companys cash flow and fund flow statements reflect two different variables during a specific period of time. Cash flow analysis is a tool of short-term financial analysis while the funds flow analysis is comparatively a long-term one. This is because the financial statements ie Income. FUNDS FLOW ANALYSIS Fund flow is the net of all cash inflows and outflows in and out of various financial assets. Cash flow statements signify the changes in the cash and cash equivalents of the business due to the business operations in one time period. The focus of cash flow analysis is to study the movement and flow of cash during the accounting period. Cash flow statement contains opening and closing balances of cash and cash equivalents. The performance of an asset or fund is not taken into account only share redemptions or outflows and share purchases or inflows. A cash flow analysis should be preceded by a funds flow analysis.
The analysis which studies the flow and movement of funds is called as funds flow analysis. Funds flow statements report changes in a businesss working capital from its operations in a single time period but have largely been superseded by cash flow statements. Cash Flow statement is useful for a short term financial analysis of cash planning while Fund Flow Statement is helpful to a long-term analysis of financial planning. Cash flow and Fund flow are two different statements that have a varied scope and serve a different purpose in a business. Fund flow is the net of all cash inflows and outflows in and out of various financial assets. Cash flow analysis is a tool of short-term financial analysis while the funds flow analysis is comparatively a long-term one. Cash flow statement contains opening and closing balances of cash and cash equivalents. A student of Commerce needs to have clarity on these concepts. It has become a useful tool in their analytical kit. Investors financial analysts and management use these statements to take important investment decisions regarding the company or the stock.
CASH FLOW AND FUND FLOW PRESENTED BY- ARHAAM ANSARI ROLL NO-9. This requires the doing of cash flow analysis. A banker embarks on a cash flow analysis when is satisfied about the reliability of the projections and creditworthiness of a borrower by using other tools of analysis. The company not generating the same amount of cash as competitors will eventually lose out when time gets rough. The concept of Cash Flow and Fund Flow is fundamental to the discipline of accounting. While both cash flow and fund flow are a part of financial accounting the latter focuses on the net movement of funds both inflows and outflows. The difference between cash flow and fund flow is evident in accounting. A companys cash flow and fund flow statements reflect two different variables during a specific period of time. Cash flow statements signify the changes in the cash and cash equivalents of the business due to the business operations in one time period. A cash flow analysis is concerned only with the change in the cash position while a fund flow analysis is concerned with change in working capital position between two balance sheet dates.
It has become a useful tool in their analytical kit. A banker embarks on a cash flow analysis when is satisfied about the reliability of the projections and creditworthiness of a borrower by using other tools of analysis. A projected cash flow statement is more of a toll for the control and monitoring of finances of a business. Fund flow is typically referred to as the working capital of a business and is analyzed to identify and determine the changes in the working capital for a given period along with its reasons. It is beneficial to assess the liquidity position of a company. Investors financial analysts and management use these statements to take important investment decisions regarding the company or the stock. Cash flow statement contains opening and closing balances of cash and cash equivalents. Funds flow statements report changes in a businesss working capital from its operations in a single time period but have largely been superseded by cash flow statements. The concept of Cash Flow and Fund Flow is fundamental to the discipline of accounting. Cash flow and Fund flow are two different statements that have a varied scope and serve a different purpose in a business.
Investors financial analysts and management use these statements to take important investment decisions regarding the company or the stock. Cash and Funds Flow Statements NOTES The Funds Flow Statement1 is widely used by financial analysts credit grant-ing institutions and financial managers in performance of their jobs. It is systematic use of ratio to interpretthe financial statements so that the strength and weaknesses of a firm isdetermined. Cash Flow statement is useful for a short term financial analysis of cash planning while Fund Flow Statement is helpful to a long-term analysis of financial planning. Cash flow refers to the overall cash generated by the firm in a specific accounting period and is calculated as the sum total of cash from operations cash flow from financing and cash flow from investing activities whereas the fund flow of the company records movement of the cash in and cash out from the company during the specified period of time. The analysis which studies the flow and movement of funds is called as funds flow analysis. Cash flow statement contains opening and closing balances of cash and cash equivalents. A cash flow analysis is concerned only with the change in the cash position while a fund flow analysis is concerned with change in working capital position between two balance sheet dates. A student of Commerce needs to have clarity on these concepts. While both cash flow and fund flow are a part of financial accounting the latter focuses on the net movement of funds both inflows and outflows.
