Difference Between Cash Flow and Funds Flow Analysis
| S.No. | FUND FLOW STATEMENT | CASH FLOW STATEMENT |
| 1. | This analysis shows the changes in working capital fixed assets etc. between two periods. | This analysis shows the changes in cash position between two periods. Cash Flow Statement is based upon cash basis of accounting. |
| 2. | Increase in funds does not always means increase in cash. | Increase in cash does always mean increase in fund. |
| 3. | Fund flow analysis notes the overall changes in funds of the company and we can decide overall stability of business unit. | Cash flow analysis notes the changes in cash position only and one can’t know the stability of Co. by this analysis. |
| 4. | It reveals the long term stability of business. | It reveals the short term cash position of the business. |
| 5. | Management can take long term major decisions with the help of this statement. | Management can take short term decisions regarding cash only. |
| 6. | This analysis includes cash flow analysis because cash is a part of working capital. | This analysis does not include fund flow analysis because this covers only cash transactions. |
| 7. | While preparing statement of changes in working capital if current assets increase or current debts decrease, working capital increases. | In cash flow analysis increase in current assets or decrease In current debts means reduction in cash. |
Cash Flow Statement Format
You might also like : Funds Flow Statement: Meaning & How to Prepare
If you want to download PDF Of Cash Flow and Funds Flow Analysis you might want to click on the green download button below.
