cash flow and fund flow ppt

All information related to the Cashflow Statement and Fund Flow Statement. And what is the procedure? Advantages & disadvantages

1. CASH FLOW AND FUND FLOW PRESENTED BY:- ARHAAM ANSARI ROLL NO:-9

2. C ASH F LOW S TATEMENT Cash flow statement is the actual movement of cash into and cash out of an organisation.The flow of cash into the business is called as cash inflow or positive cash flow and flow of cash out of the firm is called cash outflow or negative cash flow . The difference between inflow and outflow of cash is the net cash flow .

3. Objective of cash flow statement To determine cash requirements. To determine cash position (inflow & outflow) Efficient and effective cash management. To identified liquidity position. To help in dividend decisions Provide information in proper manner.

4. Particular Cash flow from operating activities:- Net Profit:- ……………. Add:-decrease in current assets increase in current liabilities Less:-increase in current assets decrease in current liabilities Add:-Non cash /non-operating exp.. depreciation Goodwill Patents intt.on debenture Less:-Non-cash /Non-operating income Dividend Income Profit on sale of Fixed assets Intt.income add:-Proposed Dividend Add:-Transfer to reserve Add:- Interium dividend Add:-Provision for taxation Less:-Tax paid Net cash from operating activities:- Amount

5. Particular 2.Cash flow from investing activity sale of assets …………………….. purchase of assets (…………………..) dividend received …………………… Net cash used in investing activity 3.Cash flow from financing activity Issue of shares ……………………. Redemption of shares (…………………...) Loan from bank …………………… Net cash used in financing activity Amount ……………. ……………..

6. Advantages of cash flow statement Helps to evaluate the current cash position. Projected cash flow helps to know the future cash position. It helps in taking loan form banks and other financial institutions. Helps the management in taking short-term financial decisions. Statement explain the causes for poor cash position.

7. Dis -advantages of cash flow statement It ignores non-cash transactions. Not suitable for income statement. Cash flow statement gives only a narrow picture of working capital as compare fund flow statement.

8. F und f low s tatement Fund flow statement indicates the amount of change in various balance sheet items between two accounting dates. It shows the source and use of funds during an accounting period. In another words , it is a statement that shows how the funds are obtained and how they are put into use .

9. Steps involve in the prepration of fund flow statement

10. Advantages of fund flow statement Helps in knowing the sources & use of fund. Helps in improving working capital position. Helps in assessing the efficiency of management utilization of fund. Helps in planning investment of funds. It show the relation-ship between working capital and net income. It evaluate post financial performance.

11. Dis -advantages of fund flow statement It ignore the non-fund items. It is not original but just a systematic re-arrangements of fund. Fund flow statement is basically historic in nature.