Difference between Cash Flow Statement and Fund Flow Statement
➔ There are several meanings for the term funds. A cash flow statement is a statement of changes in the financial position prepared on a cash basis.
➔ A fund flow statement is prepared based on a statement of changes in a company’s financial position, which is commonly referred to as a statement of working capital.
➔ Both cash flow statements and funds flow statements provide information about changes in a business’ financial position. However, there are a few key differences between a cash flow statement and a fund statement.
Basis |
Cash Flow Statement |
Fund Flow Statement |
| Concept | It is based on a wider concept of funds, i.e. working capital. | It is based on a narrow concept of funds, i.e. cash. |
| Accounting | It is based on accrual basis of accounting. | It is based on cash basis of accounting. |
| Working Capital Schedule | Schedule of changes in working capital is prepared to show the changes in current assets and current liabilities. | No schedule of changes working capital is prepared. |
| Preparation Method | Funds flow statement reveals the sources and applications of funds. The net difference between sources and applications of funds represents net increase in working capital. | It is prepared by classifying all inflows and outflows in term of ing , investing and financing ies. The net difference represents increase or decrease. |
| Usefulness | It is useful in planning intermediate and long term financing. | It is useful in planning intermediate and long term financing. |
| Description | It describes the reasons for change in working capital. | It describes the reasons for changes in cash and cash equivalent. |
References
- Admin. (2020, July 10). Difference between cash flow and fund flow. BYJUS. https://byjus.com/commerce/difference-between-cash-flow-and-fund-flow/
- Bajaj Broking. (n.d.). Difference between Cash Flow and Fund Flow | Bajaj Broking. https://www.bajajfinservsecurities.in/difference-between-cash-flow-and-fund-flow
(Founder of Management Notes)
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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