Meaning of Fund
Fund Flow Statement is widely used tool in the hands of financial executives for analyzing the financial performance of a concern. Funds keep on moving in a business which itself is based on a going concern concept. In broader sense, the term “fund” refers to money values in whatever form it may exits.
Meaning of Flow of Fund
The term ‘Flow’ means change. Thus flow of fund means change in fund or change in working capital. Flow of fund is said to have taken place when a business transaction makes a change in the amount of fund which existed just before the happening of the transaction.
Current and Non-Current Accounts
Current accounts can be either be current assets or current liabilities. Current assets are those assets which in the ordinary course of business can be or will be converted into cash within a short period of normally one accounting year. Current liabilities are intended to be paid in the ordinary course of business within a short period normally one accounting year out of the current assets or the income of the business. Following is the list of current and non-current accounts: Current liabilities| Current Assets| 1. Bills Payable| 1. Cash in hand|
2. Sundry Creditors| 2. Cash at Bank|
3. Expenses Outstanding| 3. Bills Receivable|
4. Dividend Payable| 4. Sundry Debtors|
5. Bank Overdraft| 5. Short-term loans and Advances| 6. Short-term loans| 6. Marketable Investments|
7. Provision against current assets| 7. Inventories such as Raw Material, Work-in-Progress, Finished goods| 8. Provision for Taxation etc| 8. Prepaid Expenses| | 9. Accrued Income|
Non-Current or Permanent Liabilities | Non-Current or Permanent Assets | 1. Equity Share Capital| 1. Goodwill|
2. Preference Share Capital| 2. Land|
3. Debentures| 3. Building|