PRESENTED BY JIJI A LAL SEM4 MBA MGT1005416

INTRODUCTION
A fund flow statement is a technical device designed to highlight the changes in the financial position of the business enterprise between two balancesheets.Funds statement depicts the sources from where additional funds during the current year as compared to previous year have been received and to what uses these funds have been applied.

MEANING
The term flow means change and the term flow of funds means change in funds or change in working capital .in other words any increase or decrease in working capital means funds flow.Veiwed from angle of working capital concept of funds ,the flow of funds refers to movement of funds involving inflow and outflow

DEFINTION
A statement of sources and applications of fund is a technical of fund is a technical device designed to analyze the changes in the financial condition of a business enterprise between two dates Foulke The fund flow statement describes the sources from which additional funds were derived and uses to which these funds were put. Robert.N Anthony

Objectives or uses of fund flow statement

It

provides a detailed analysis and understanding of changes in the distribution of financial resources between two balance sheet dates. It shows how the funds were obtained and used during period. The sources from which funds were obtained are useful in computation of cost of capital of business.

 It gives indication of any weakness or strength

in the general financial position of a firm. It throws light on the financial consequences of business operations. It can be compared with the relevant budgets to assess the usage of funds as per plans. Rearrangement of capital structure,formuating long term financial plans and policies etc.are facilitated by fund flow statements.

Modern technique of preparing fund flow statement

The fund flow analysis involves preparation of two statements ,they are Schedule of changes in working capital Statement of sources and application of funds.

CONCLUSION
A fund flow statement is a valuable aid to financial manager or a creditor in evaluating the uses of funds by a firm and in determining how these uses are financed.in the nutshell fund statements are very useful in planning intermediate and long term financing.it is an important tool of working capital analysis.

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