by
Muhammad Waleed Majeed , Executive Director , Commodex (Pvt.) Limited Deals in International Commodity Trading
Difference between Funds Flow Statement and Cash Flow Statement
Fund Flow and Cash Flow1. Broader concept i.e. working
capital.Narrow concept i.e. cash, which is only one of the elements of working capital.2.Various sources from where the funds generated with various uses to which they are put.Cash flow statement starts with the opening balance of cash and reaches to the closing balance of cash by proceeding through sources and uses.3. Long-range financial strategy.Short-term liquidity of the business for a certain period.4.In funds flow statement changes in current assets and current liabilities are shown through the schedule of changes in working capital.In cash flow statement changes in current assets and current liabilities are shown in the cash flow statement itself.5.Funds flow statement shows the causes of changes in net working capital.Cash flow statement shows the causes the changes in cash.6.Funds flow statement is in alignment with the accrual basis of accounting.In cash flow statement data obtained on accrual basis are converted into cash basis.
