Exemplary Difference Between Cash Flow And Fund Flow Statement
The major differences between cash flow statement and fund flow statement are as follows.
Difference between cash flow and fund flow statement. Cash flow refers to the concept of inflow and outflow of cash and cash equivalents during a particular period. The reasons for the change in working capital are known through fund flow statement. Both Cash Flow and Fund Flow are two essential apparatus to measure the financial health or position of a business or company.
Cash basis of accounting. Inflows and outflows of cash and cash equivalents. The key difference between the cash flow statement and fund flow statement is that cash flow statement is a statement that records the cash inflows and outflow for a financial year whereas fund flow statement is a statement used to assess the change in financial position of a company between two accounting periods that shows the inflow and outflow.
Fund Flow Statement and Cash Flow Statement sounds similar to a common man however both of the two are also completely different terms and reflects different factors of the firm. The cash flow statement is best suited to gauge a companys liquidity profile whereas the fund flow statement is best geared towards long-term financial planning. Fund flow refers to the concept of financial changes in working capital over a period of time.
This article explains the difference between these two statements and how they help stakeholders know the sources and application of cash and funds with the help of definition comparison chart key variations and. It is ended with closing cash in hand and cash equivalents. Main purpose is to show the movement of cash.
Difference between Cash flow and Fund Flow Statements Meaning. In cash flow cash from the operations is calculated. The cash flow statement is prepared so that at the end of a particular period the net cash flow of the company can be calculated.
Lets look at some of the differences between cash flow and funds flow statement 1. While funds flow statement reveals the change in the working capital of a company between two balance sheet dates while cash flow statement reveals the change in the cash position of the company between two balance sheet dates. The cash flow statement known formally as the Statement of Cash Flows reports a companys change in cash and cash equivalents from one balance sheet date to another.