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.






Sources of funds:


Application of Funds


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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