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What is Funds Flow Statement?
Funds Flow Statement is a statement that is prepared to show the inflow and outflow of funds for a particular period of time. This statement is prepared to analyse and explain the changes in the working capital of a company and to inspect the reasons for such changes. The Funds Flow Statement indicates the changes in the financial position of a company between two balance sheets, and also, shows the sources from where the funds are acquired and the expenses in which the funds are spent. It provides the gist of the income and expenditure of a company during a financial year.
This is an important topic of Accounting and Finance. And if you are a student of Accountancy, you may have to do homework and assignments on this topic. We are here to provide you Steps in Preparation of Funds Flow Statement homework help anytime, whenever you need.
Steps to prepare the Funds Flow Statement
The preparation of the Funds Flow Statement involves three important steps:
Step 1: Preparing the statement of changes in Working Capital
Step 2: Preparing the funds from Operations
Step 3: Preparing the Funds Flow Statement
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