FUND FLOW STATEMENT

As the words indicates fund flow refers to the changes in fund (i.e. Working capital) by a business transaction . There is always a flow of fund (change in working capital) by these business transaction which: (a) (b) Increase the current assets but do not bring any increase in current liabilities and vice-versa. Decrease in current assets but do not bring any decrease in current liabilities and vice-versa

Hence, the difference between the two (current asset &current liabilities) is called working capital

Scientific methods of preparation of fund flow statement

FUND FLOW STATEMENT

SCHEDULED CHANGE IN WORKING CAPITAL

STATEMENT OF SOURCES AND USES OF FUND

FUND FROM OPERATION

FORMAT OF SCHEDULED CHANGE IN WORKING CAPITAL

WORKING CAPITAL CHANGES
INCREASE (Rs.) DECREASE(Rs.)

END OF THE YEAR CURRENT YEAR (Rs.) CURRENT ASSETS ---------------TOTAL(A) CURRENT LIABILITIES ---------------TOTAL(B) WORKING CAPITAL(AB) INCREASE/DECREASE IN WORKING CAPITAL TOTAL -----------------------------------------------------------------------------------------PREVIOUS YEAR (Rs.)

---------------

----------------

-------

CURRENT ASSETS AND LIABILITIES EXTRACTED FROM THE COMPARATIVE BALANCE SHEET OF X LTD. FOR 2002 & 2001:

CURRENT ASSETS PARTICULARS

CURRENT LIABILITIES 2002

4000
8000 25000 35000 3000 400

2001
3000
6000 20000 28000 6000 1200

PARTICULARS
BILLS PAYABLE
CREDITORS PROVISION FOR TAX OUTSTANDING EXP. RESERVE FOR D/D

2001
4000
16000 8000 200 2000

2002
3000
17000 5000 400 3000

CASH IN HAND
BILLS RECIEVABLE BOOK DEBTS STOCK INVESTMENT PREPAID EXP.

TOTAL

64,200

75,400

TOTAL

30,200

28,400

SCHEDULED CHANGE IN WORKING CAPITAL

END OF THE YEAR 2002 (Rs.) CURRENT ASSETS CASH IN HAND BILLS RECIEVABLE BOOKS DEBTS STOCKS INVESTMENT PREPAID EXP. TOTAL(A) CURRENT LIABILITIES BILLS PAYABLE CREDITORS PROVISION FOR TAX OUTSTANDING EXP. RESERVE FOR D/D TOTAL(B) WORKING CAPITAL(AB) INCREASE/DECREASE IN WORKING CAPITAL 47,000 34,000 --------3000 17000 5000 400 3000 28,400 4000 16000 8000 200 2000 30,200 1000 ---------3000 -----------------4000 8000 25000 35000 3000 400 75,400 3000 6000 20000 28000 6000 1200 64,200 1000 2000 5000 7000 ------------------2001 (Rs.) INCREASE (Rs.)

WORKING CAPITAL CHANGES DECREASE (Rs.)

-----------------------------3000 800

-------1000 --------200 1000

13000

TOTAL

19000

19000