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Chapter 4. Cash Flow Analysis > 4.10 Differences Between Cash Flow Statement an...

4.10 DIFFERENCES BETWEEN CASH FLOW STATEMENT AND FUND FLOW STATEMENT

Both Cash Flow Statement as well as Fund Flow Statement are very important tools for managerial decision making. But there are some fundamental differences between these two, which are as follows:

Cash Flow Statement Fund Flow Statement

1. Cash Flow Statement exhibits inflows and outflows of cash and cash equivalents alone.

1. Fund Flow Statement exhibits inflows and outflows of funds (i.e., working capital) alone.

2. While preparing a Cash Flow Statement, cash refers to cash in hand, cash at bank (demand deposits) and short-term investments (i.e., Cash & Cash equivalents alone).

2. While preparing a Fund Flow Statement, fund refers to the working capital (i.e., Current Assets and Current Liabilities alone).


  

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