Cash Flow and Fund Flow Statement
The cash flow will record a company's inflow and outflow of actual cash
(cash and cash equivalents). The fund flow records the movement of
cash in and out of the company. Both help provide investors and the
market with a snapshot of how the company is doing on a periodic
basis.
Cash flow refers to the outflow and inflow of cash or cash equivalents in
an organization in a specific period. Cash flow is recorded in the cash
flow statement, which is one of the most important financial statements
in accounting.
There are many sources of cash flow in an organization which may be
categorized as:
1. Cash Flows from Operating activities: It represents the movement
of cash from the core operations of a business
2. Cash Flows from Investment Activities: It represents the flow of
cash due to purchase or sale of an asset or any other investment
activities for the business
3. Cash flow from financing activities: It involves changes in the flow
of cash involving selling or paying off financial instruments such
as the issuance of debt, issuing shares and debentures or repayment
of debt
Fund flow refers to the working capital of the company, and a fund flow
statement is prepared to visualize the changes in working capital of the
company over a period of time. Investors use the fund flow information
to determine where capital needs to be invested.
There are two types of inflow of funds in a business
1. Funds generated by the business operations
2. Long term funds raised by issuing shares or sale of fixed assets.
The cash flow will record a company's inflow and outflow of actual cash
(cash and cash equivalents). The fund flow records the movement of
cash in and out of the company. Both help provide investors and the
market with a snapshot of how the company is doing on a periodic
basis.
Cash flow refers to the outflow and inflow of cash or cash equivalents in
an organization in a specific period. Cash flow is recorded in the cash
flow statement, which is one of the most important financial statements
in accounting.
There are many sources of cash flow in an organization which may be
categorized as:
1. Cash Flows from Operating activities: It represents the movement
of cash from the core operations of a business
2. Cash Flows from Investment Activities: It represents the flow of
cash due to purchase or sale of an asset or any other investment
activities for the business
3. Cash flow from financing activities: It involves changes in the flow
of cash involving selling or paying off financial instruments such
as the issuance of debt, issuing shares and debentures or repayment
of debt
Fund flow refers to the working capital of the company, and a fund flow
statement is prepared to visualize the changes in working capital of the
company over a period of time. Investors use the fund flow information
to determine where capital needs to be invested.
There are two types of inflow of funds in a business
1. Funds generated by the business operations
2. Long term funds raised by issuing shares or sale of fixed assets.
