A Funds Flow Statement is a financial document that analyses a company’s Balance Sheet of two years to validate the movement of funds from the previous financial year to the current year. In other words, it compares the source of inflow and outflow of funds during the concerned accounting period and analyses how it affects the working capital of an organization. In light of the above statements, discuss the various uses of a Funds Flow Statement. Also, mention if such a statement suffers from any limitations.
A Funds Flow Statement is a financial document that analyses a company’s Balance Sheet of two years to validate the movement of funds from the previous financial year to the current year. In other words, it compares the source of inflow and outflow of funds during the concerned accounting period and analyses how it affects the working capital of an organization. In light of the above statements, discuss the various uses of a Funds Flow Statement. Also, mention if such a statement suffers from any limitations.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 26BE
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A Funds Flow Statement is a financial document that analyses a company’s Balance Sheet of two years to validate the movement of funds from the previous financial year to the current year. In other words, it compares the source of inflow and outflow of funds during the concerned accounting period and analyses how it affects the working capital of an organization.
In light of the above statements, discuss the various uses of a Funds Flow Statement. Also, mention if such a statement suffers from any limitations.
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