Funds Flow Statement

After ascertaining the increase or decrease in net working capital and funds or loss from operation, the next step is to prepare the funds flow statement. The purpose of preparing the funds flow statement is to know about the funds obtained and used by the firms. The funds flow statement has two sides. On the left hand side, the sources of funds are shown and on the right hand side, the uses or applications of funds are shown.

Sources..................................... Amt...........Applications...................................Amt

Funds from operation .............xxx........Increase in working capital...............xxx

Decrease in working capital....xxx.........Loss from operation...........................xxx

Issue of share............................xxx.........Redemption of preference share......xxx

Issue of debenture...................xxx..........Redemption of debenture..................xxx

Increase in long term liabilitie.xxx.........Purchase of fixed assets.....................xxx

Sales of fixed assets..................xxx..........Investment made................................xxx

Sale of long term investment...xxx..........Repayment of long term liabilities... xxx

non trading receipt.....................xxx..........Non trading payment.........................xxx