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Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
Fund&Cash Flow
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Fund&Cash Flow

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Basics for the preparation of Fund flow statement

Basics for the preparation of Fund flow statement

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  • 1. Presentation by [email_address] IKJ SAMUEL <ul><li>STATEMENT SHOWING CHANGES IN FINANACIAL POSITION </li></ul>FUND FLOW &CASH FLOW STATEMENT
  • 2. IKJ SAMUEL
  • 3.  
  • 4.  
  • 5. Statement of sources & application of funds <ul><li>SOURCES </li></ul><ul><li>FUNDS FROM OPERATION </li></ul><ul><li>ISSUE OF SHARES </li></ul><ul><li>ISSUE OF DEBENTURES </li></ul><ul><li>LONG TERM LOANS </li></ul><ul><li>SALE OF FIXED ASSETS &OTHER INVESTMENTS </li></ul><ul><li>NON TRADING RECEIPTS </li></ul><ul><li>APPLICATION </li></ul><ul><li>PUCHASE OF FIXED ASSETS &INVESTMENTS </li></ul><ul><li>REDEMPTION OF PREFERENCE SHARES &DEBENTURES </li></ul><ul><li>REPAYMENT OF LONG TERM LOANS </li></ul><ul><li>PAYMENT OF DIVIDENTS </li></ul><ul><li>PAYMENT OF TAXES </li></ul><ul><li>LOSS FROM OPERATIONS </li></ul><ul><li>DECREASE IN WORKING CAPITAL </li></ul><ul><li>INCREASE IN WORKINGCAPICAPITAL </li></ul><ul><li>If the sources exceeds application,it increases working capital </li></ul><ul><li>And vice versa </li></ul>
  • 6.  
  • 7. SOURCES AND APPLICATION OF CASH <ul><li>DERIVATION OF CASH </li></ul><ul><li>OPERATING PROFIT </li></ul><ul><li>DECREASE IN ASSET EXCEPT CASH </li></ul><ul><li>INCREASE IN ANY LIABILITY </li></ul><ul><li>ISSUE OF SHARES </li></ul><ul><li>RENT,INTEREST &DIVIDEND RECEIVED </li></ul><ul><li>DISPOSITION OF CASH </li></ul><ul><li>OPERATING LOSS </li></ul><ul><li>INCREASE IN ASSET EXCEPT CASH </li></ul><ul><li>DECREASE IN ANY LIABILITY </li></ul><ul><li>REDEPTION OF SAHRES &DEBENTURES </li></ul><ul><li>CASH DIVIDEND PAID </li></ul>CSAH
  • 8. ( Account form) <ul><li>INFLOW OF CASH </li></ul><ul><li>Cash from operations </li></ul><ul><li>Issue of shares &debentures </li></ul><ul><li>Barrowing of L.T. Loans </li></ul><ul><li>Sale of fixed assets &investments </li></ul><ul><li>Non-trading receipts e.g. dividend,rent, etc. </li></ul><ul><li>DECREASE IN CASH BALANCE </li></ul><ul><li>OUTFLOW OF CASH </li></ul><ul><li>Loss from operations </li></ul><ul><li>Purchase of shares & debentures </li></ul><ul><li>Repayment of LT loans </li></ul><ul><li>Purchase of fixed assets &investments </li></ul><ul><li>Payment of dividends & taxes </li></ul><ul><li>INCREASE IN CASH BALANCE </li></ul>CASH FLOW STATEMENT
  • 9. (Report form) <ul><li>INFLOW OF CASH </li></ul><ul><li>Cash from operations </li></ul><ul><li>Issue of shares &debentures </li></ul><ul><li>Long term loans &sale of fixed assets,investments </li></ul><ul><li>Non trading receipts </li></ul><ul><li>------------------- </li></ul><ul><li>------------------- </li></ul><ul><li>Outflow of cash </li></ul><ul><li>Loss from operations </li></ul><ul><li>Redemption of shares & debentures </li></ul><ul><li>Repayment of L.T. loans &purchase of fixed assets </li></ul><ul><li>Payment dividend &taxes </li></ul><ul><li>---------------- </li></ul><ul><li>---------------- </li></ul>CASH FLOW STATEMENT INCREASE/ DECREASE IN CASH BALANCE <ul><li>Instead of showing increase or decrease in cash balance the statement may start with </li></ul><ul><li>Opening balance of cash & reach closing balance of cash through inflows &outflows </li></ul>
  • 10. PREPERATION OF FUND FLOW STATEMENT <ul><li>Requirements: </li></ul><ul><li>1.Balance sheets of the current &previous years </li></ul><ul><li>2.Adjustments which are to be incorporated. </li></ul><ul><li>Classification of‘Assets’ & ‘liabilities’ </li></ul><ul><li>Preparation of schedules </li></ul><ul><li>1. schedule of changes in working capital…. </li></ul><ul><li>to find ‘increase/decrease in working capital </li></ul><ul><li>2. ’Adjusted profit &loss account’…. </li></ul><ul><li>to find “Funds from operations”or”loss in operations ” </li></ul><ul><li>3. ‘Ledger accounts’….. </li></ul><ul><li>to find i)Application of funds,ii)Sources of funds </li></ul><ul><li>iii)Transfer of accounts </li></ul>
  • 11. CLASSIFICATION OF ASSETS AND LIABILITES <ul><li>ASSETS </li></ul><ul><li>1. Current assets: </li></ul><ul><li>Stock,debtors,B/R,short -term investments,cash. </li></ul><ul><li>2. Non-current assets: </li></ul><ul><li>Fixed assets,long term investments. </li></ul><ul><li>3.Intangible assets: </li></ul><ul><li>Goodwill,Patents etc., </li></ul><ul><li>4. Fictious assets: </li></ul><ul><li>P/L a/c,preliminary exp., Discount on shares etc. </li></ul><ul><li>LIABILITIES </li></ul><ul><li>1 .Current liabilities: </li></ul><ul><li>Creditors,bank o/d,B/R, short term loans etc., </li></ul><ul><li>2.Non-current liabilities: </li></ul><ul><li>Share capital,Reserves &surplus,Provision etc., </li></ul><ul><li>Long term liabilities </li></ul>
  • 12. SCHEDULE OF CHANGES IN WORKING CAPITAL <ul><li>PREPARE THE SCHEDULE WITH FOLLOWING RULE: </li></ul><ul><li>INCREASE IN CURRENT ASSETS& DECREASE IN CURRENT LIABILITIES </li></ul><ul><li>Increases the working capital </li></ul><ul><li>DECREASE IN CURRENT ASSESTS& </li></ul><ul><li>INCREASE IN CURRENT LIABILITIES </li></ul><ul><li>Decreases the working capital </li></ul>
  • 13.  
  • 14. LEDGER ACCOUNTS <ul><li>To Opening balance By Bank-sale (S) </li></ul><ul><li>To Bank-purchases (A) By Adj.P/L a/c-depreciation </li></ul><ul><li>TOAdj.P/L a/c-profit onsale By Adj.P/L a/c-loss on sale </li></ul><ul><li>-------- -------- </li></ul><ul><li>To Bank-payment(A) By Opening balance </li></ul><ul><li>To Closing balance By Adj.P/L a/c-transfer(T) </li></ul><ul><li>By Barrowings(S) </li></ul><ul><li>---------- ------- </li></ul><ul><li>---------- ------- </li></ul>ASSETS A/C LIABILITIES A/C BALANCE IN ACCOUNTS Would be ‘sale’ or’purchase’ or transfer
  • 15. ADJUSTED PROFIT &LOSS ACCOUNT <ul><li>To Depreciation- fixed asset a/c </li></ul><ul><li>To Loss on sale of fixed asset </li></ul><ul><li>To Goodwill written off </li></ul><ul><li>To Preliminary expenses </li></ul><ul><li>To General reserve </li></ul><ul><li>To Dividend paid </li></ul><ul><li>To Provision for taxation </li></ul><ul><li>To BALANCE c/f </li></ul><ul><li>--------- </li></ul><ul><li>--------- </li></ul><ul><li>By BALANCE b/d </li></ul><ul><li>By Profit on sale of fixed assets </li></ul><ul><li>By Dividend,Interest </li></ul><ul><li> re ceived etc. </li></ul><ul><li>By Profit on redemption of shares &debentures </li></ul><ul><li>By ‘FUNDS FROM OPERATIONS’ ** </li></ul><ul><li>----------- </li></ul><ul><li>------------ </li></ul><ul><li>---------- --------- </li></ul>**Balancing figure
  • 16. CALCULATION OF CASH FROM OPERATIONS ADJUSTMENTS TO CONVERT FROM ACCRUAL BASIS TO CASH BASIS FUNDS FROM OPERATIONS-(Adj.P/L a/c ) ***** LESS Working capital changes requiring cash or Not providing cash : INCREASE IN CURRENT ASSETS & DEREASE IN CURRENT LIABILITIES ***** -------- ADD: Working capital changes providing cash Or not requiring cash DECREASE IN CURRENT ASSETS & INCREASE IN CURRENT LIABILITIES ***** --------- ***** CASH FROM OPERATIONS *****

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