fund flow statement

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Flow of Funds Statement : 

Flow of Funds Statement

Slide 2: 

A summary of a firm’s changes in financial position from one period to another; it is also called a sources and uses of funds statement or a statement of changes in financial position. Has been replaced by the cash flow statement (1989) in U.S. audited annual reports.

Flow of Funds Statement : 

Flow of Funds Statement What are “funds”? All of the firm’s investments and claims against those investments. Extends beyond just transactions involving cash.

Why Examine the Flow of Funds Statement : 

Why Examine the Flow of Funds Statement The Flow of Funds Statement: Includes important noncash transactions while the cash flow statement does not. Is easy to prepare and often preferred by managers for analysis purposes over the more complex cash flow statement. Helps you to better understand the cash flow statement, especially if it is prepared under the “indirect method.”

USES OF FFS : 

USES OF FFS ESTIMATING THE AMOUNT OF FUNDS NEEDED FOR THE GROWTH PLANNING OF TEMPORARY INVESTMENTS AND WORKING CAPITAL SECURING ADDITIONAL FUNDS WHEN NEEDED PLANNING THE PAYMENTS OF DIVIDEND

CONSTRUCTION : 

CONSTRUCTION TWO FACTS ARE CONSIDERED FOR PREPARATION OF FFS: 1.SOURCES OF INFORMATION: TWO COMPARITIVE BALANCE SHEETS. SUMMARIZED INCOME STATEMENT STATEMENT OF RETAINED EARNINGS SUPPLEMENTARY INFORMATION. 2.PROCEDURAL FRAMEWORK: STATEMENT OF CHANGES IN WORKING CAPITAL STATEMENT OF SOURCES AND APPLICATION OF FUNDS

ANALYSING EFFECT ON WC : 

ANALYSING EFFECT ON WC NATURE OF TRANSACTION EFFECT ON WC INCREASE IN CA INCREASE DECREASE IN CA DECREASE INCREASE IN CL DECREASE DECREASE IN CL INCREASE

SOURCES AND APPLICATIONS OF FUNDS : 

SOURCES AND APPLICATIONS OF FUNDS OPERATIONAL PROFITS OR FUNDS FROM OPERATIONS ISSUE OF SHARE CAPITAL OR DEBENTURES. INCOME FROM INVESTMENTS LONG TERM LOANS REPAYMENT OF CAPITAL REDEMPTION OF DEBENTURES PAYMENT OF LONG TERM LOANS PURCHASE OF INVESTMENTS PURCHASE OF FIXED ASSETS PAYMENT OF TAXATION/PROPOSED DIVIDEND OPERATIONAL LOSS

FORMAT : 

FORMAT SOURCES AMOUNT ISSUE OF SHARES ISSUE OF DEB. SALE OF FIXED ASSETS SALE OF LONG TERM INV. BANK LOANS OPERATIONAL PROFIT DECREASE IN WC APPLICATIONS AMOUNT REPAYMENT OF CAPITAL REDEMPTION OF DEBENTURES PAYMENT OF LONG TERM LOANS PURCHASE OF INVESTMENTS PURCHASE OF FIXED ASSETS PAYMENT OF TAXATION/PROPOSED DIVIDEND OPERATIONAL LOSS INCREASE IN WC

Slide 10: 

SCHEDULE OF CHANGES IN WORKING CAPITAL

FUNDS FROM OPERATIONS : 

FUNDS FROM OPERATIONS NP AS PER P&L A/C RS. RS. ADD. ITEMS WHICH DO NOT RESULT IN OUTFLOW OF FUNDS. 1.DEPRECIATION DURING THE YR. 2. LOSS ON SALE OF FIXED ASSETS 3. CAPITAL EXP.( GOODWILL ,PATENTS) 4. PROVISION FOR IT 5. ANY OTHER ITEM LESS: ITEMS WHICH DO NOT RESULT IN INFLOW OF FUNDS. 1.GAINS ON SALE OF FA/INVESTMENTS 2. DIVIDEND RCVD. ON INVESTMENTS 3.ANY OTHER ITEM FUNDS FROM OPERATIONS