Difference between fund flow statement and cash flow statement ? what are the benefits & downside of these statement

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The financial position of any company can be better understood with the help of a Cash Flow Statement and Fund Flow statement, along with the Balance Sheet and a Profit & Loss Account.

Cash Flow statement shows the changes in the cash position (Inflows and outflows) of a firm and is an analytical reconciliation statement which explains the reasons for the differences between the opening and closing cash balances over a period. Fund Flow statement is a statement that shows the ups and downs of the financial position or the changes in working capital of the entity between the two financial years. Check out the article given below, which explains the difference between cash flow and fund flow statement in tabular form.

• A statement that shows the changes in the cash and bank balance between opening and closing dates is known as a cash flow statement while a statement that shows the variations in the financial position between the two financial years is known as a fund flow statement.
• Cash Flow Statement analyses the cash generating efficiency of the entity. Conversely, Fund Flow Statement examines the firm’s efficiency in utilising the working capital.
• Cash Flow statement is a part of Financial Statement. Unlike Fund Flow Statement which is not a part of the Financial Statement
• Cash Flow statement is useful for a short term financial analysis of cash planning while Fund Flow Statement is helpful to a long-term analysis of financial planning.
• Cash flow statement contains opening and closing balances of cash and cash equivalents. On the contrary, fund flow statement does not contains opening and closing balances of cash and cash equivalents.
• Cash Flow statement uses the Cash basis of accounting. On the contrary, Fund Flow statement uses the Accrual Basis of Accounting.
• Cash Flow statement shows the inflows and outflows of cash, but Fund Flow Statement shows the sources and application of funds.

 fund flow statement

 fund flow statement is a disclosure of the types of inflows and outflows the company has experienced. cash flow statement

A cash flow statement is one of the quarterly financial reports publicly traded companies are required to disclose to the U.S. Securities and Exchange Commission (SEC) and the public. The document provides aggregate data regarding all cash  inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for activities  and investments during a given quarter.