Scribd
Upload
27 views2 pages

Cash Fund: V. Cash Flow Analysis

The document discusses cash flow analysis and cash flow statements. It defines a cash fund as only including cash and bank balances. It defines cash flow as the actual movement of cash in and out of a business, with inflows implying positive cash flow and outflows implying negative cash flow. It states that a cash flow statement depicts the change in a business's cash position between two balance sheet dates by taking into account opening and closing cash and bank balances as well as sources and uses of cash. The document also lists some steps in preparing a cash flow statement and discusses the significance of the cash flow statement for evaluating a business's current cash position, determining financial policies, and facilitating cash planning and analysis of past cash cycles.

Uploaded by

Rakesh Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
27 views2 pages

Cash Fund: V. Cash Flow Analysis

The document discusses cash flow analysis and cash flow statements. It defines a cash fund as only including cash and bank balances. It defines cash flow as the actual movement of cash in and out of a business, with inflows implying positive cash flow and outflows implying negative cash flow. It states that a cash flow statement depicts the change in a business's cash position between two balance sheet dates by taking into account opening and closing cash and bank balances as well as sources and uses of cash. The document also lists some steps in preparing a cash flow statement and discusses the significance of the cash flow statement for evaluating a business's current cash position, determining financial policies, and facilitating cash planning and analysis of past cash cycles.

Uploaded by

Rakesh Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

V.

CASH FLOW ANALYSIS

CASH FUND
It includes only cash along with bank balance.
CASH FLOW
It means actual flow or movement of cash in & out of
an enterprise. The increase in the cash balance implies the inflow
of cash, source of cash or positive cash flow. The decrease in the
cash balance indicates the out flow of cash, application of cash or
negative cash flow.
CASH FLOW STATEMENT
It is a statement, which depicts the change in the cash
position of a concern between one balance sheet dates to
another. A cash flow statement is prepared by taking into account
the opening & closing cash &bank balances, various sources of
cash & various uses of cash.

STEPS
Ascertainment of operating cash profit.
i)

Ascertainment of cash flow from operations.

ii)

Preparations of cash flow statement.

Significance

It gives penetration review of cash movements over an


operating cycle.
i. It is helpful to a concern to evaluate its current cash position.
ii. It

is

helpful

in

determining

the

policies

of

financial

management like dividend payments, repayments of longterm loans etc


iii. It facilitates an affective & efficient cash planning.
iv. It helps the management to analyse the past behavior of the
cash cycle, & to control the uses of cash in future.

You might also like