PRESENTATION ON THE TOPIC OF FORMAT OF FUND

PRESENTATION ON THE TOPIC OF FORMAT OF FUND FLOW STATEMENT SUBMITTED TO MRS. SHARU KAUSHAL SUBMITTED BY GAUTAM KHURANA UG 1866004003 BCOM(H)

Meaning of fund flow statement Fund flow statement is a statement that reflects the relative position of funds of the company over a two-period horizon and enables analysis of sources and uses of funds for a particular period of time. A fund flow statement highlights about where the funds have been generated and to what it has been put for use

METHODS FOR PREPARING FUND FLOW STATEMENT Fund flow statement Change in working capital Fund from operation Statement of sources and uses of funds

STEPS FOR PREPARING FUNDS FLOW STATEMENT The steps involved in preparing the statement are as follows: STEP 1 Prepare statement of change in working capital STEP 2 prepare funds from operation STEP 3 preparation of fund flow statement NOTE- Be sure the total of all sources including those from operations minus the total of all uses equals the change found in working capital in Step 1.

CHANGES IN WORKING CAPITAL Step 1: Preparation of Statement of Changes in Working Capital: Statement of Changes in working capital is a summary that shows the net increase or decrease in the working capital of the business. The working capital of the firm increases if there is an increase in the current assets or decrease in the current liabilities. However, the working capital of the firm decreases if there is a decrease in the current assets and an increase in the current liabilities.

FORMAT OF CHANGES IN WORKING CAPITAL

FUNDS FROM OPERATION Step 2: Determination of Funds from Operations: MEANING OF FUND FROM OPERATION- Funds from operations refers to the profit earned or loss incurred from the regular business operation. The ascertainment of funds from the operation is vital for the preparation of fund flow statement. Fund from operation can be solved by direct or indirect method.

FORMAT OF FUNDS FROM OPERATION DIRECT METHOD

FORMAT OF FUNDS FROM OPERATION INDIRECT METHOD

FUND FLOW STATEMENT Preparation of Fund Flow Statement: After recognizing the funds/loss from operations, fund flow statement is prepared, which will show the net increase or decrease in the working capital. Basically, any change in the assets and liabilities may result in the inflows and outflows of funds, but not always, as in case of depreciation or revaluation of assets, there is no inflow or outflow of funds. Hence, only those assets or liabilities will become a part of the statement, which actually leads to the flows of the fund to/from the business.

FORMAT OF FUND FLOW STATEMENT