FUNDS FLOW STATEMENT Vs CASH FLOW STATEMENT
Funds flow statement Vs Cash flow statement The differences are as follows: Funds flow statement Cash flow statement 1. It is based on accrual accounting system. 1. While preparation of this statement, all transaction effecting the cash and cash equivalents are taken into consideration. 2. It analysis the sources and application of funds of long-term nature and net increase or decrease in long term funds will be reflected on working capital of the firm, 2. It considers only the increase or decrease in current assets and current liabilities in calculating the cash flow from operations. 3. More useful in long range planning. 3. More useful for identifying and correcting the current liquidity problems of the firm. 4.Sound fund position does not necessarily mean sound cash operation 4. Sound cash operation is always followed by sound fund position. 5. It shows the funds generated a