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CASH FLOW & FUNDS FLOW STATEMENT:

CASH FLOW STATEMENT: The cash flow statement shows how much cash inflow and cash outflow of a business concern over an accounting period, normally a month or a year. These statements are key to both financial modelling and accounting. In cash flow statement income affect cash and cash equivalents, and breaks the analysis down to Operating, investing and financing activities. It is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities.

  • Operating activities –converts the reported items on the income statement from the accrual basis of accounting to cash.

  • Investing activities – It give reports about purchase and sale of long term investment, Land & building, plant & machinery.

  • Financing activities - Provide reports about issue and purchase of the company’s bond, stock and payment of dividend.

Specimen of cash flow statement:

CASH FLOW STATEMENT AS ON YEAR ENDING DTD 31/03/2019

ParticularsAmountTotal Amount
OPENING CASH AS ON DTD: 01/04/2018 XXX
OPERATING ACTIVITIES :
CASH RECEIVED FROM CUSTOMERS.
LESS:
PURCHASE OF INVENTORY
OPEARATING & ADMN EXPENSES
INTREST.
SALARIES & WAGEES

NET CASH FLOW FROM OPERATING ACTIVITIES

XXX

XXX
XXX
XXX
XXX

XXX









XXX
INVESTING ACTIVITIES :
CASH RECEIPT FROM SALE OF LAND & BUILDING
CASH RECEIPT FROM SALE OF PLANT & MACH.
SALE OF INVESTMENT SECURITIES
LESS :
PURCHASE OF LAND & BUILDING
PURCHASE OF PLANT & MACHINERY
LOANS MAKING TO OTHER ENTITIES
INVESTMENT IN SECURITIES

NET CASH FLOW FROM INVESTING ACTIVITIES.

XXX
XXX
XXX

XXX
XXX
XXX
XXX

XXX











XXX
FINANCING ACTIVITIES :
SALE OF STOCK
BORROWING
LESS : REPURCHASE OF STOCK
REPAYMENT OF LOANS & DIVIDEND

NET CASH FLOW FROM FINANCING ACTIVITIES.

XXX
XXX
XXX
XXX

XXX








XXX
NET INCREASE IN CASH
(NET CASH FLOW FROM OPEARATING ACTIVITIES)
+
(NET CASH FLOW FROM INVESTING ACTIVITIES)
+
(NET CASH FLOW FROM FINANCING ACTIVITIES)
XXX
CASH AT END OF THE YEAR
(OPENING CASH AS ON DTD: 01/04/2018)
+
(NET INCREASE IN CASH)
XXX

Here one thing must be remember that opening cash & bank must be come from previous year closing which has been shown in last year Balance Sheet.

FUNDS FLOW STATEMENT: Fund flow statement is prepared in order to know the inflow and outflow of funds i.e. Sources and Applications of funds for a particular period. It is prepared to analyse the reasons for changes in financial position of a Company in two Balance Sheets. The objective of funds flow statement is to disclose the cause of changes in the assets, liabilities and capital between two balance sheets. While preparing a Funds Flow Statement, current assets and current liabilities are to be ignored. Attention is to be given to changes in Fixed Assets and Fixed Liabilities.

Specimen of cash flow statement:

FUNDS FLOW STATEMENT AS ON YEAR ENDING DTD 31/03/2019

SOURCES OF FUNDS AMOUNT APPLICATION OF FUNDS AMOUNT
ISSUE OF SHARES. XXX REDEMPTION OF SHARES XXX
ISSUE OF DEBENTURES. XXX REDEMPTION OF DEBENTURES XXX
LONG TERM LOAN. XXX REPAYMENT OF LOANS XXX
SALE OF INVESTMENTS. XXX INVESTMENTS. XXX
SALE OF FIXED ASSETS. XXX PURCHASE OF FIXED ASSETS. XXX
NON-TRADING COMPANY XXX DIVIDEND PAID. XXX
FUND LOST OF OPEARTION XXX
NON TRADING PAYMENTS XXX
NET DECREASE IN WORKING CAPITAL XXX NET INCREASE IN WORKING CAPITAL XXX
XXX XXX

The above discussion are belongs to fund flow & cash flow which should be applied in business concern in order to conclusion about cash inflow & out flow and also sources of fund & application of funds.

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