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) Increase the current asset’s but do not bring any

increase in current liabilities and vice-versa.
(b) Decrease in current asset’s 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 STATEMENT OF SOURCES AND

FUND FROM OPERATION
CAPITAL USES OF FUND
FORMAT OF SCHEDULED CHANGE IN WORKING CAPITAL

WORKING CAPITAL
END OF THE YEAR CHANGES
CURRENT YEAR PREVIOUS YEAR (Rs.) INCREASE (Rs.) DECREASE(Rs.)
(Rs.)

CURRENT ASSETS

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

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

TOTAL(A)

CURRENT
LIABILITIES

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

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

TOTAL(B)

WORKING CAPITAL(A-
B)

INCREASE/DECREASE TOTAL ------- -------

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

CURRENT ASSETS CURRENT LIABILITIES

PARTICULARS 2001 2002 PARTICULARS 2001 2002

 CASH IN HAND 3000 4000  BILLS PAYABLE 4000 3000

 BILLS RECIEVABLE 6000 8000  CREDITORS 16000 17000

 BOOK DEBTS 20000 25000  PROVISION FOR TAX 8000 5000

 STOCK 28000 35000  OUTSTANDING EXP. 200 400

 INVESTMENT 6000 3000  RESERVE FOR D/D 2000 3000

 PREPAID EXP. 1200 400

TOTAL 64,200 75,400 TOTAL 30,200 28,400

SCHEDULED CHANGE IN WORKING CAPITAL

END OF THE YEAR WORKING CAPITAL

CHANGES
2002 (Rs.) 2001 (Rs.) INCREASE (Rs.) DECREASE (Rs.)
CURRENT ASSETS
CASH IN HAND 4000 3000 1000 -------
BILLS RECIEVABLE 8000 6000 2000 --------
BOOKS DEBTS 25000 20000 5000 ---------
STOCKS 35000 28000 7000 ---------
INVESTMENT 3000 6000 ---------- 3000
PREPAID EXP. 400 1200 ---------- 800
75,400 64,200
TOTAL(A)
CURRENT LIABILITIES
BILLS PAYABLE 3000 4000 1000 --------
CREDITORS 17000 16000 ---------- 1000
PROVISION FOR TAX 5000 8000 3000 ---------
OUTSTANDING EXP. 400 200 ---------- 200
RESERVE FOR D/D 3000 2000 --------- 1000
28,400 30,200
TOTAL(B)
WORKING CAPITAL(A- 47,000 34,000
B)
INCREASE/DECREASE --------- 13000
IN WORKING
CAPITAL

TOTAL 19000 19000