The document discusses the preparation and format of a fund flow statement. It explains that a fund flow statement can be prepared using either the direct method, which calculates funds from operations directly, or the indirect method, which makes adjustments to net profit in the income statement. The fund flow statement is important because it identifies changes in working capital and reveals how business activities have affected the flow of funds, providing useful information for planning future activities not shown in other financial statements.

1. FUND FLOW STATEMENT

2. Scientific methods of preparation of Fund Flow Statement

3. FORMAT OF SCHEDULE OF CHANGES IN WORKING CAPITAL

6. Funds from operationsDirect methodIndirect methodDirect methodFunds from operations = Funds from operating revenue less funds for operating expenses

7. Indirect Method Profit & Loss Adjustment Account

8. Statement of AdjustmentNet Profit as per Profit & Loss Account **Add: Non- Cash and non – operating expenses ** Less :Non-cash and non- operating income **Funds from operations **

9. Format of Fund Flow Statement

10. Need for fund flow statement Shortcomings in Balance Sheet2. Shortcomings in Profit & Loss Account

11. Importance of Fund Flow StatementGives information about amount of working capital and changes in the amount of working capital.It analyses Balance sheet to reveal the financing & investing activities.It analyses the Profit & Loss Account to reveal the effect of business activities of the concern on the flow of funds.It is a tool for planning future activities of business.