Funds – flow statement
While preparing a funds flow statement, current assets and current liabilities are to be ignored. Alternation is to be given to changes in Fixed Assets and Fixed Liabilities. The statement may be prepared in the following form.
FUNDS FLOW STATEMENT
| Sources of funds: |
Rs. |
Application of Funds |
Rs. |
| Issue of Shares |
— |
Redemption of Redeemable |
— |
| Issue of Debentures |
— |
Preference Shares |
— |
| Long-term Borrowing |
— |
Redemption of Debentures |
— |
| Sale of Fixed Assets |
— |
Payment of other long-term loans |
— |
| Operating profit* |
— |
Operating Loss* |
— |
| Decrease in working capital |
— |
Payment of dividend, tax, etc. |
— |
|
|
Increase in working capital* |
—- |
* Only one figure will be there.
The change in working capital disclosed by the ‘schedule of changes in working capital will tally with the change disclosed by the ‘funds flow statement’.
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