Outstanding Fund Flow Analysis In Management Accounting
Fund flow analysis serves as a valuable aid to financial manager or creditor in evaluating the use of funds by firm and in explaining how these uses are financed.
Fund flow analysis in management accounting. Fund flow statement is a statement which shows inflows and outflows of fund. It helps the management of a company to define its investment policy by highlighting the changes in working capital. Fund flow statement is an important chapter in management accounting.
A fund flow statement is a statement prepared to analyse the reasons for changes in the financial position of a company between two balance sheets. Up to 5 cash back 5 Fund Flow Analysis LEARNING OBJECTIVES On completion of the study of the chapter you should be able to understand. The technique of funds flow analysis is widely used by the financial analyst credit granting institution and financial managers in performance of their jobs.
It enables the firm to evaluate its current financing pattern and take suitable corrective measures in case it finds any inadequacies. In a narrow sense the term fund means cash and the fund flow statement depicts the. School of distance education accounting for management page 3 contents page module i accounting for management- introduction 5 module ii analysis and interpretation of financial statements 14 module iii funds flow statement 68 module iv marginal costing 95 module v responsibility accounting 119.
What is the meaning and concept of Fund. Meaning of Funds Flow Statement. It portrays the inflow and outflow of funds ie.
Funds flow statement is also known as statement of sources and uses of funds. - Selection from Management Accounting Book. It provides details of inflow and outflow of funds ie sources.
It is a statement which discloses the analytical information about the different sources of a fund and the application of the same in an accounting cycle. Fund flow analysis is important tool of financial analysis. Future flow can also be evaluated through projected fund statement.