difference between Funds Flow and Cash Flow statements?
Answer Posted / ajay
The Fund Flow statement shows from where the business got the fund and where the fund was applied for a particular period.
Please Note the WORD-"FUND". Fund means not containing cash but non-cash too. There may assets like furniture or anything which can come into business without paying cash......Like a businessman may use his personal furniute or any asset for business. This way the fund will come into business but not in cash form instead it is in furniture.
On the other hand, Cash flow statement shows only pure cash transactions in summarised form but absolute and not on net basis. Cash generated from different activities can be seen and it shows from which activities cash is coming and where it is outflowing.
The underlying difference between the two is inclusion of non-cash transactions so before distinguishing......learn the meaning of word "FUND".
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