DIFFERENCES BETWEEN CASH FLOW ANALYSIS AND

FUNDS FLOW ANALYSIS

A CASH FLOW ANALYSIS IS CONCERNED ONLY WITH THE CHANGE IN THE CASH
POSITION, WHILE A FUND FLOW ANALYSIS IS CONCERNED WITH CHANGE IN
WORKING CAPITAL POSITION, BETWEEN TWO BALANCE SHEET DATES.

BASIS FOR COMPARISON CASH FLOW STATEMENT FUND FLOW STATEMENT

Fund Flow Statement is a financial

Cash Flow Statement is the
tool, designed to analyse the
summarized statement of cash
Meaning changes in financial position of the
receipts and cash payments of the
firm, comparing two financial
firm between two financial periods.
years.

Basis of Accounting Cash Basis of Accounting Accrual Basis of Accounting

Discloses Inflows and Outflows of Cash Sources and applications of funds

Tool for Short term financial analysis Long term financial analysis

To explain the causes of changes in

To explain the cash movement the balance sheet items, i.e. asset
Objective
amidst two points of time. and liabilities between two
financial year.

Opening Balance Opening balance is present No opening balance

Indicates the closing balance of Indicates the increase or decrease

Difference in sides
cash in working capital

Part of Financial
Yes No
Statement