Name of the Staff : Dr.

Vanishree , Assistant Professor , Department of Commerce (IB),

GAC,Cbe

Name of the subject :Management Accounting

Subject Code : 18BIB41C

Unit : III

Reference : Management Accounting – Dr.Reddy & Moorthy

Reference : Management Accounting – Dr.Reddy & Moorthy

 Chapter 3
Funds Flow Statement Introduction
Numerous transactions of financial nature take place in a business firm over a period of time.
It is necessary to consolidate and summarise to obtain a comprehensive idea about the nature,
effect, consequences and result of the transactions. It is customary to prepare an income
Statement and a Balance Sheet at the end of a period to provide a summarised version of all
the financial transactions of a period. However the Income Statement has limited scope and is
restricted to the inflows and outflows of net assets resulting from supply of goods or services.
Similarly the Balance Sheet is a static statement, presenting the assets and liabilities on a
particular day. Financial Management is concerned with 'management' of flow of funds
resulting from business decisions and transactions. It strives to regulate the flows in a
purposeful and profitable manner to obtain advantage to the fim. Thus it is essential to record,
analyse and interpret the changes in financial position of the firm and control the future
operations.
The Concept of 'Funds' The term 'Funds' is a highly disputed one — conveying different
meanings to different people. Its meaning spans from 'Total resources of a concern' to 'Cash
and near Cash items'. According to Paul C. Hastings "The total amount of funds used in a
firm's operations is equal to the total assets employed in an enterprise." This view supports,
the broadest meaning of 'Funds' as total resources. According to International Accounting
Standard (JAS) - 7, the term 'Fund' generally refers to Cash, to Cash equivalents or to
working capital." This view leans towards the narrower meaning of 'Funds. ' The result of
the above mentioned difference of opinion about the meaning f 'Funds' is that three different
statements were evolved for financial analysis, all of them serving different purposes.
Management Accounting (l) Statement of Changes in Financial Position: This statement is
base d on the widest interpretation of Funds as 'all resources'. It measures changes in both
(2) Cash Flow Statement : This statement is based on 'Cash concept' Of funds or the narrow
interpretation of funds. It measures the cash inflows and outflows resulting from all business
transactions. (3) Funds Flow Statement: This statement is based on the ' Working Capital,
concept of funds. It measures the inflows and outflows of working capital resulting from
different business transactions. 'Statement of Changes in financial position is discussed in
detail towards the end of this chapter. 'Cash Flow Statement' is separately dealt with in the
subsequent chapter. 'Funds Flow Statement' — the working capital concept of funds - is
discussed below.

Reference : Management Accounting – Dr.Reddy & Moorthy

Funds Flow Statement 'Flow' means change. 'Funds' is interpreted as' working capital ' in
the context of funds flow statement. Thus, 'Funds flow' is 'change in working capital'. Flow
of funds implies any changes in working capital. These changes are a continuous process,
day after day, as and when transactions take place. So, the changes in working capital may
be called 'Flow'. It can be 'Inflow' or 'Outflow' of working capital. Funds Flow Statement
measures and presents in an analytical manner the summarised version ofthe numerous
flows of funds for a specified period.
Working Capital Funds flow statement is based on the working capital concept of funds.
however, working capita l is also a controversial term. 'Gross working capital' is the total of
current assets. 'Circulating Capital' is the amount revolving in the cycle of 'Cash —
Inventories — Receivables and Cash'. 'Net working Capital' is the excess of Current Assets
over Current liabilities. Funds Flow statement is generally prepared and interpreted on the
basis of 'Net Working Capital'. Net working capital can be computed as the difference
between Current Assets and Current liabilities.
Current Assets All those assets which are converted into cash in the normal course
ofbusiness within one year or within the operating cycle are known as 'current Assets'. The
intention in acquiring such assets must be to convert them into cash. The conversion has to
take place in the normal course of business. The time span for the conversion should not
exceed one year or the operating cycle of the business. The following are the different
categories of current assets. (a) Cash and near cash items: Cash in hand, cash at bank, Govt.
bonds, fixed deposits in banks, trade investments, etc. Statement Flow debtors, etc.
Stocks of raw materials. Work-in-Progress or semi-finished goods and the finished goods.
©Advances recoverable in Cash : Advances and loans to employees, advances to suppliers,
etc (e) Prepaid expenses, etc. like prepaid Insurance. current Liabilities. A those liabilities
which are payable in cash in the normal course of business within a period of one year or
within the operating cycle are called current liabilities. Here also, the intention of cont-
acting the liability must be to pay it off in the course. The period of repayment should not
exceed one year or the operating cycle. Thus, the long term loans or debentures, etc., in the
year of repaynent also should not be treated as current liabilities because they were not
intended to be paid off within one year out ofcurrent assets The following are the different
current liabilities: (a) Accounts Payable: Bills payable, notes payable, trade creditors arrd
non trade creditors. (b) Borrowings on Short term basis : Temporary bank overdraft, short-
term bank loans, private borrowings repayable within one year. (c) Outstanding expenses :

Reference : Management Accounting – Dr.Reddy & Moorthy

Expenses for which payment has become due. (d) Incomes received in advance : Money
received in advance for service to be rendered or goods to be supplied in future. (e) Tar
Payable and Dependable When tax is assessed, it becomes a liability. Similarly divided
declared is a liability. Provisions against Current Liabilities and Assets 'Provision for
doubtful debts', 'Provision for discount on creditors', 'Provision made against trade
investments are also current items. They reduce the respective current assets or liabilities.
Non-Current Assets: All assets other than the current assets can be termed non-current
assets. They include the following: (a) Fixed assets like land, buildings, machinery,
furniture, loose tools, etc. (b) Intangible assets like goodwill, patents, copyrights, etc. (c)
Long-term investments in shares of other companies, Govt. Bonds, etc. Noncurrent
liabilities: All those liabilities which are not included under rent liabilities' may be termed as
-'noncurrent liabilities. Share capital, debentures, Public deposits, Reserves, etc. are
included in this category. Transaction Analysis (or) Identification of Transactions Which
castle funds As a prelude to preparation of funds flow statement, it is essential the
numerous business transactions to identic & those in flow of funds or which cause changes
in working capital. Which Working capital, in the context off trends flow statements is und
difference between current assets and current liabilities. So, business which cause change in
the working capital are deemed to result in All the business transactions may be classified
into (l) Those which do not cause any change in funds and (2) Those transactions The
transactions which affect funds may be again classified into (a) transactions which increase
funds and are termed 'Sources of funds'. (b) transactions which decrease funds and are
termed as 'Applications of fund Identification of transactions which increase or decrease
funds is essential for 'Funds Flow Analysis". For this purpose, the following broad
classification of assets and liabilities and guidelines for identification of transactions are
useful (l) Current Accounts — Both current assets and current liabilities (2) Non current
accounts — Both long term liabilities and fixed assets. Guidelines for Transaction Analysis
(a) Any transaction between a current account and another current account does not affect
funds: Thus: l. A transaction involving two current assets does not affect 2 A transaction
involving two current liabilities does not affect funds 3. A transaction involving a current
asset and a current liability does not affect funds. (See examples below) (b) Any
transaction between a noncurrent account and another non account does not affect funds:
Thus: l. A transaction involving two noncurrent or fixed assets does affect funds. 2A
transaction involving two long term liabilities does not fund 3. A transaction involving a

Reference : Management Accounting – Dr.Reddy & Moorthy

noncurrent asset and a long term also does not affect funds. (c) Any transaction between a
current account a noncurrent a affects funds statement l. When debtors are collected, debtors
decrease but cash increases by (he same amount. Total current assets remain unaffected
Working capital does not change. 2 When bills payable are issued to creditors payable
increase out creditors decrease by the same amount. Total current liabilities remain the
same. Working capital does not change 3. When cash is paid to creditors, creditors decrease.
but cash also decreases. Thus the decrease in the current liabilities is equal to the decrease
in current Assets. Working capital is not at ail affected. (b) When Land is given to a
building Promoter in return for some fiats, Land which is a fixed asset decreases but 'Flats'
another Fixed asset 'increases. No current asset or current liability is involved in the
T5ransaction and working capital is not at all affected. 2. When Debentures are converted
into shares, Debentures which is a long term liability decreases but share capital is also long
term liability increases. No current asset or current liability is Involved and thus working
capital (or) Funds are not at all affected. 3. When Machinery is acquired by issue of shares,
Machinery which is a Fixed asset increases. Share capital which is a long term liability also
increases. However, no current assets or current liabilities are affected and working capital
does not change. (c) l. When shares are issued for cash both share capital and cash increase.
The increase in cash increases total current assets and the working capital increases to that
extent. Thus, this transaction is an example for source of funds. 2. Creditors may be settled
by issue of debentures to them. Here 'debentures' which is a long term liability increases and
'creditors' which is a current liability decreases. The decrease in creditors decreases the
total current liabilities and the working capital increases to that extent. This transaction is an
example for source of funds without involving cash.
SOME POINTS TO NOTE FOR PREPARATION OF FUNDS FLOW STATENCNT
l. Treatment of Tax and Dividend (a) It is preferable to treat them as noncurrent items if
nothing is (b) If 'tax payable' or 'dividend payable' is given on the balance sheet Provision
for tax and proposed dividend are noncurrent. Once assessed or dividend is declared, it
becomes a liability to be paid Off immediately. 2. Tax and Dividend given in different
ways (a) If provision for tax and dividend are given in the adjustments alone and nothing is
given in the balance sheets, the given amount is debited to adjusted profit and loss account.
It is also shown as application in funds flow statement. It is presumed that provision is made
and payment is also made immediately. (b) If provision for tax and proposed dividend are
given in the balance sheets alone and nothing is mentioned in the adjustments: The opening

Reference : Management Accounting – Dr.Reddy & Moorthy

balance of these items can be assumed to have been paid in cash during the current year.
The opening balances are shown as application of funds. The closing balances are debited to
the adjusted profit and loss account as provisions made in the current year. (c) If provision
for tax and proposed dividend are given in the balance sheet as well as in adjustments: It is
necessary to prepare separate ledger accqunts for them. From those accounts, the tax paid
and dividend paid are shown as applications of funds. The provisions made are shown in the
debit side of adjusted profit and loss account (See illustrations 16 and 18). (d) Interim
dividend should be treated separately from proposed dividend, 3. Investments 'Trading
investments' or 'current investments' or 'Short-term investments' should be taken as current
assets. Non trading investments and income thereon should be treated as non current items.
If nothing is mentioned, ' investments' may be treated as Non-Current 4. Reconciliation of
Profits When 'Reported Income' or net profit for the current year is given along with
opening and closing balance sheets, it is better to reconcile the p roff' Dividend paid may be
found as Balancing figure. Net profit + Opening balance of Profit and Loss — Transfer to
reserve - Closing balance of Profit and Loss = Dividend.
Cash Flow Statement 1. Meaning and importance of Cash Flows and Cash Flow
Statement Funds flow analysis portrays all the financial transactions which cause changes in
working capital. But working capital comprises of various current assets and current
liabilities. Thus the quantum of cash inflows and outflows cannot be ascertained from funds
flow analysis. 'Cash Flow' includes cash inflows and out flows — cash receipts and cash
payments — during a period. Movements of cash are of vital importance to the management.
The short term liquidity and short term solvency positions of a firm are dependent on its cash
flows. A basic objective of financial management is to match the inflows and outflows of
cash in such a way that the numerous demands for cash like payments for expenses, payment
to suppliers etc., are promptly managed without maintaining excessive cash balance. A cash
flow statement is a statement which portrays the changes in the cash position between two
accounting periods. The detailed analysis provided in such a statement provides a clear
insight to the management about the different sources of cash inflows and the different uses
or applications for which cash is needed. It helps in taking short term financial decisions and
also in the preparation of cash budget for the next period. The term 'cash' in the context of
cash flow analysis includes the 'cash balance' and the 'bank balance' of a business unit. Cash
flow analysis can reveal the causes for even highly profitable firms experiencing acute cash
shortages. A detailed study of the sources for cash can help to improve or accelerate the

Reference : Management Accounting – Dr.Reddy & Moorthy

inflow from each source and may even lead to discovering new sources. similarly a minute
analysis of the different applications of cash may help to slow down or reduce the out flows
of cash. The greatest benefit can be in getting a clear insight into the methods of matching the
inflows with the outflows. Detailed study of the sources for cash can help to improve or
accelerate the inflow from each source and may even lead to discovering new sources.
Similarly a minute analysis of the different applications of cash may help to slow down or
reduce the out flows of cash. The greatest benefit can be in getting a clear insight Into the
methods of matching the inflows with the outflows. Differences between Funds Flow
Analysis and Cash Flow Analysis The changes in the financial position of a firm can be
analysed by either funds now analysis or cash flow analysis. The following differences
between the two approaches which attempt to portray the financial (1) Basis of preparation.
Funds flow analysis is based on the capital concept of 'funds'. Cash flow analysis is based on
the cash concept of 'funds' etc., 2. Basis of accounting: Funds flow analysis is based on
'Accrual concept, accrual basis of accounting. Cash flow analysis is based on 'cash or
concept or cash basis of accounting. 3. Changes shown: Funds flow analysis shows the
various causes for change in the working capital position over a period of time, usually the
period between two balance sheet dates. Cash flow analysis reveals the causes for change in
the cash position over the same accounting period. 4. Usefulness: Funds flow analysis is
more useful for decision making in the long run. Cash flow analysis is more useful in the
short run. It is a useful tool to make short term financial decisions. 5. Short term solvency:
Cash flow analysis cannot clearly reveal the short term solvency position of a firm because
It considers only cash and ignores all other current assets and liabilities. Funds flow analysis
is a better indicator for short term solvency because it considers all the current assets and
liabilities and presents a more comprehensive position. 6. Inter Dependence: Working
capital includes cash also. Thus, improvement in cash position automatically improves
working capital also. But the reverse is not always true. Working capital may increase even
if cash decreases. 7. Difference based on techniques of preparation of the statements: (a)
Cash flow statement starts with opening cash and bank balances and ends with closing cash
and bank balances. There are no balances in the preparation of funds flow statement. (b)
Funds from operations are ascertained and shown in finds flow statement. The funds from
operations are further adjusted to ascertain cash from operations for the purpose of cash
flow statement. (c) Increase in current assets and decrease in current liabilities increase the
working capital and vice versa. On the other hand increase in current assets and decrease in

Reference : Management Accounting – Dr.Reddy & Moorthy

current liabilities actually decrease the cash. 8. Preparation of Budgets: Wien budgetary
control system is in operation, cash flow analysis is very useful to make the short term
estimates of cash for the preparation of cash budget.
Cash flow Statement Funds flow analysis is an important tool for the preparation of capital
Expenditure budget particularly for the medium term. In conclusion. we can say that cash
flow analysis is more relevant for the f e short term decisions of the management whereas
funds flow analysts 3.advantages or Benefits of Utility of Cash Flow Statement: cash
flow statement is an important tool of financial management in short financial analysis. The
following are the important uses Of cash flow analysis and cash flow statement.
the resultant cash flow statement 1. Historical analysis as guide to forecasting: Cash
flow statement presents in detail the movements of cash in the recent past. This can provide
clear indications for the cash flows in the future period, thus helping in forecasting the
future commitments and needs. 2. Effective cash management: Cash flow statement can
act as a guide for coordinating the inflows and outflows of cash. The 'Matching' of the
future cash receipts with payments results in effective cash management. 3. Formulation
of financial policies: A clear insight into the cash flows of the firm is the basis for financial
policies like dividend policy, cash discount, credit terms, etc. 4. Preparations of cash
budget: Cash flow statement is almost like the 'foundation' for cash budget. The cash flows
in the recent past indicate the quantum and direction of such flows and form the basis for
preparing monthly or quarterly budgets for cash or even the annual cash budget for the
ensuing year. 5. Short term financial decisions: Short range financial decisions like
repayment of overdraft or loans, payment of bonus. advertising campaigns, investments
outside the firm, etc., may be taken on the basis of the analysis provided by the cash flow
statement. 6. Liquidity position: It reveals the liquidity position of the him by highlighting
the various sources of cash and its uses. 7. Revelations: It can reveal the causes for
profitable firms experiencing acute cash shortages. The reasons for any mismanagement of
cash for creating such a position can be analysed and its recurrence can be avoided. 4.
Limitations of cash flow analysis l. Cash flow statement discloses inflows and outflows of
cash alone. Thus its scope is very limited compared to funds flow statement which reveals
the changes in working capital or the income statement which displays the overall financial
position. 2. Cash flow statement reveals the cash balance. But it can be easily altered by
postponing payments for purchases or delaying collection of receivables, etc. Management.
3. Since non-cash items of expenses and incomes are excluded provide a comprehensive

Reference : Management Accounting – Dr.Reddy & Moorthy

picture of a firm's financial position ' cannot in spite of the limitations. cash flow statement
is extensively used input a along with ratio analysis to obtain clear perception of the
liquidity and
5. Preparation of Cash Flow Statement Cash flow statement is prepared on the same lines
as the funds flow statement, but strictly restricted to sources and uses of cash. Preparation
of the statement is based on the opening and closing balance sheets, profit and loss account
and other relevant information. Cash flow statement starts with the cash and bank balances
at the commencement of the period. If there is bank overdraft and cash balance, the net
cash balance or net bank overdraft becomes the starting point. The different 'sources' of cash
are added to the opening balance and the 'applications' of cash are subtracted. The balance
represents cash and bank balances at the end of the accounting period. If a negative balance
is Obtained, it represents the bank overdraft at the end of the period. The closing balance or
overdraft thus arrived at should be the same as shown in the closing balance sheet for the
accounting period. Sources and Applications of Cash The various sources and uses of cash
are to be ascertained or computed from the accounting statements and other information.
I. Sources of cash: —A business can have two kinds of sources Of cash (A) Cash from
operations; and (B) extremal sources. (A) A Cash from operations: A business generates
cash inflows through its normal business operations which is usually the most important and
routine source of cash. It is the internal source for cash. Computation of cash from
operations (i) When all transactions are cash transactions: It is a hypothetical situation
where all expenses incomes and revenues are paid or received in cash. In such a case, the
net profit revealed by profit and loss accounts represents 'cash from operations'. Net loss
represents 'cash out flow on account of operations'. (ii) When all transactions are not cash
transactions: In practice income statements are prepared on accrual basis; several-non cash
items are shown in the income statement; credit transactions result in debtors and creditors.
Opening and closing inventories are to be accounted for. in such situations, cash from
operations is ascertained in two stages. l. Computation of funds from operations (just as in
the case of a funds flow statement) 2.computation of cash from operations by adjusting
the current assets and liabilities operations. I. computation of funds from operations This
is done in the same way as was explained in the funds flow analysis. An profit and loss
account may be prepared or a statement of funds from rations can be prepared, with the net
profit revealed by the profit and loss account. as the starting point. The following items are
added back to the profit by the profit and loss account. (a) Depreciation on fixed assets

Reference : Management Accounting – Dr.Reddy & Moorthy

because it decreases profit without any cash (b) Loss on sale of fixed assets since the loss is
not a cash loss. The same applies to loss on sale of investments. [c) Capital Losses,
fictitious assets and intangible assets written off They do not result in any cash out flow.
Examples are goodwill written off, discount on debentures written off. (d) Transfer to
reserves: Any transfer to reserves are only book entries and do not affect cash. The
following items are reduced from the net profit. l. Profit on sale of fixed assets and
investments: Cash received from sale of investments and fixed assets including the profit is
shown separately, as a source. So it should not be a part Of cash from operations. 2
Transfers from reserves or profit and loss account which do not result in cash inflow. 3.
Income tax refund, income from investment, etc. which non operating incomes. 2.
Calculation of cash from operations The net profit shown by an income statement is on
'Accrual' basis. It is essential to convert the various items affecting the profit into 'cash'
basis'. Ascertaining finds from operations has accomplished this task to some extent by
adding back to the net profit all 'non cash' expenses shown in profit and loss account and
subtracting the non-cash incomes. The funds from operations need farther adjustment to be
converted fully to cash basis. For this purpose all the current assets and current liabilities
except. cash and bank balances are to be analysed from the point of view of their impact on
cash. The following explanations should clarify the effect of the changes in the current
asset and current liabilities on the cash flows. (a) Effect of credit sales and Debtors on
cashflows: Both cash sales and credit sales increase the revenues of a business and the funds
from operations and net profit are proportionately more. But cash inflow is not improved by
the credit sales immediately.. Thus both cash sales and credit sales can increase.
Accounting funds by increasing the cash and debtor balances. But cash balance the extent
Of cash sales only. However when debtors are ills go up without any increase in the funds
because the working capital The debtors created through credit sales, thus, affect funds and
cash not affected different times. cash from operations through credit sale transactions at
can be Net profit + Opening debtors (presumed as presented as follows: collected) —
Closing debtors, Cash from operations (or) Net profit + Decrease in debtors — Increase
in Cash from operations — debtors. (b) Effect of credit purchases and creditors
on cashflows: cash paid purchases reduces cash balance and results in cash out flow.
purchases creates trade creditors, thus decreasing the working capital or the modes. But cash
is not immediately affected. When the creditors are paid later on, the cash out flow takes
place. Cash outflow through credit purchases can be summed-up as follows: Net profit +

Reference : Management Accounting – Dr.Reddy & Moorthy

Closing creditors — Opening Cash from operations — creditors (presumed to be paid 00
(or) Cash from operations = Net profit + Increase in creditors — Decrease in creditors. (c)
Effect of unsold goods in stock on cashflows: The opening stock shown on the debit side of
income statement reduces the net profit without affecting the cash flows. Similarly the
closing stock credited to the income statement increases the net profit without actually
increasing cash inflows. Effect of changes in stock on cash from operations can be
summarised as under: Cash from operations = Net profit + Opening stock — Closing
stock. (or) Cash from operations = Net profit + Decrease in stock (or) — Increase in
stock. (d) Effect of outstanding expenses and incomes received in advance: Outstanding
expenses are debited to the income statement though they are not yet paid. Thus net profit
reduces, without actually resulting in cash outflow. Similarly incomes received in advance
are subtracted from the income heads consumed, thus reducing the net profit. But the
income received in advance has already resulted in cash inflow, though not reflected in of
profit. Statement Effect of changes in outstanding expenses and incomes received in
advance cash from operations can be presented as follows: cash from operations = Net
profit + Closing outstanding expenses and the Incomes received in advance - Opening
outstanding expenses and incomes received in advance. (or) cash from operations = Net
profit + Increase in outstanding expenses and incomes received in advance (or) — Decrease
in outstanding expenses and incomes received in advance. (e) Effect of prepaid expenses
and accrued incomes: Prepaid expenses are reduced from the expenses concerned in the
income statement. So, they are not charged to profit and the profit is more to that extent,
though cash for them is already paid. Similarly, accrued incomes are shown as incomes in
the income statement, thereby increasing the net profit. But no cash is received for them and
cash inflow has not gone up. Effect of changes in the prepaid expenses and accrued incomes
on the cash from operations can be presented as follows: Cash from operations = Net profit
+Opening account income sand prepaid expenses — Closing prepaid expenses and accrued
incomes. (or) Cash from operations = Net profit + Decrease in accrued incomes and
prepaid expenses (or) — increase in accrued incomes and prepaid expenses. The above
discussion may be summarised as follows: (l) Total sales, whether for cash or credit,
increase funds and net profits but only cash sales increase the cash balance. So, change in
debtors due to credit sales has to be adjusted in the finds from operations. (2) Total
purchases, whether for cash or on credit decrease the finds and the profits. But cash
purchases alone reduce cash. Change in creditors due to credit purchases has to be adjusted

Reference : Management Accounting – Dr.Reddy & Moorthy

in the funds from operations. (3) All expenses incurred, whether paid for or not, decrease
funds. But expenses actually paid alone decrease cash. Change in outstanding and prepaid
exes has to be adjusted in the funds from operations. (4) All income seamed increase funds,
whether cash is received or not. But, incomes received in cash alone can increase cash
balance. Accrued incomes and incomes received in advance have to be adjusted in the
funds from operations. Management In other words the effect of credit sales, credit
purchases, stocks h' outstanding and prepaid expenses, accrued incomes and incomes good;
advance should be removed from the 'funds from operations'. The balance be 'cash from
operations'. The changes during the accounting period in current assets and liabilities other
than cash and bank balances have to be noted. Then the Of such changes should be added to
or subtracted from the funds from on the basis of the following principle.
INCREASEINCURRÉNTLIABILITY- INCREASESCASH
DECRÉASEINCURRENTLIABILITY- DECREASES CASH DECREASES CASH
INCREASE INCURRENTASSET DECREASEINCURRENTASSET – INCREASES
CASH Note: Current Assets received as consideration for shares or debentures issued
While using the above, principle, current assets received in exchange for shares or
debentures issued must be omitted from the respective closing balances of the assets (See
Illustration No. 13). The balance obtained after the above additions and deductions can be
termed as 'cash from operations,' if the balance obtained is positive. If the balance obtained
is negative, it is called "cash outflow on account of operations" (B) EXTERNAL
SOURCES OF CASH Apart from cash from operations, a firm can have several other
sources of cash outside the organisation. 1. Fresh issue of shares: Issue of shares to the
public or rights shares to the existing share holder brings in additional cash. If the issue is at
premium, the cash received from the issue increases to that extent. However issue of shares
for non-cash consideration is not a source of cash. (See Illustration No. 13). 2 Issue of
debentures or bonds: Cash is received by issue of debentures either at par or at premium or
even at discount. The actual amount received is a source of cash. 3. Long term borrowings:
Borrowings on long term basis from banks or other sources is a source of cash. Recently
public deposit have been an important source of this type. 4. Sale of fixed assets and
investments: The cash received from the sale Of fixed assets like machinery or buildings is a
source of cash. Similarly non trading investments sold is also a source of cash.

Reference : Management Accounting – Dr.Reddy & Moorthy

Reference : Management Accounting – Dr.Reddy & Moorthy
Reference : Management Accounting – Dr.Reddy & Moorthy
Reference : Management Accounting – Dr.Reddy & Moorthy
 Funds flaw Stactemout
epacution Scheclule ok ChaR wokin Capital lon)

Wasnkino (apital Sst cotemert,

end ot
erd o
l td. at t h
Balance Shect oh Alarita
T aa
Yequieed
reaueed*°P
o Prrpuu
rpau
awR fven below You
95 4 994
Changto wooukn Capital
aSdhedule af

Liabiktjes
(93 (q4 AsSe
P
Sharu Capital Laral 1,oo000 ,o0,Doo
Shoore pre mlium 5, e a co
6onoral WBwe oooEWInitwL at Co
ho
PL Al IToInvestmet at coSt
looco
P De.btons
Pnovt&ron ten dlepra- Sfock
Cation plau 50,000

Proi son ta ten 2000

nedta 86oc q5

3,oo0 44peo 3, 9),o 4A, oo

Soluton'
Sthedule o chwgo waein Capital.
Chang n uoncin CapituA
Aordtubn
DecreaaL
Cwwent ASSet P
40 COo
Debdons»
3tok
Cash 45 00 t OO0

Total 20,000
Cuwoiet 1ablihi
q o0o
Conedito
TotalB) 3boo

woki Capita 3 4 000 8o0

(A-9)
5 O00
Caplral
o 0 OOo

eom
Opeictiond
epedion
Funlb
2) ( a l c u l h o n ok ha folouv o utt
prutt
the tolouv
Gpenations
fotom
fends fetom
Calalate

drd LosS Alc.

Pprottt LOSS Aaouot

prtfcul P. Pavtiaula
Gnoss porotit 4 1Oc
ToExpens0s paid
To Depre cíalion T ooo
BGraln en ale bo ooo

lanol
To Loss on Sala
000
mathie
2o0
To Distout

To Geoc usl
To Pe progT
5,1000

&otution

dhourtng Funds Fotem OPoations,

Stedemed

pwti culeA
Praßi less A(C
Net Poogt cs e
do not deconase hurts
AAdItems wnuch
hit debued to pd AL
L
Fom oPerations
Deppedation
 LOsS on Sale o na haie Aoo

Gsxoerl U lwsüten ob6) q4- o0o

2,09,200

Les. Stems
uwmfch do no mcecae kunc
vem opexations but (reolitel to påL A/C
land
oo,ao
Gnan on ale b
poot?ons ,4,oo
Funoes eoum

detaib, 'ascezlain "Funds Feam Opetin.

Frem f e hollouin

Paxticulans
PLAC Balanc at f l md
40 o00
6enena{ RAesetue
20 oo Cco
Biod
boeo
Poteltmínasu eapendes

Depsrecl ation psovisíon

(accwmwloted ) 2 5 , o00

ome 68oM nm tradin nge>tment»

Shaes ae Vaua oR, oo geo wee
egerence tA
he yean at Rnemiun oto7. The peremfum
ve deemed dwuna
On ede mpTi0n was ehgedd to the poot d LosS A (c,

Seurion
Adued prohit d LoSS Acc6TUA tanthe zear 19

TO Tunpken to eneal BPxulaunce B/d

Tesere40,0c0-p o )
Inceme 6olem non
To roas u l wrten o taeluio invextmeats 20 o0
8,co
20, eo -12 oeo)
B Fuolb 6om oeetfon
To Peelimirnay epenses
witen okb lbooo-4,000) Cad,Fi)
To poiovission eon depseci t i i s oo
40oco - 2900o)

oPen, On Redemub Pg 0
co

Shora
T Balane Cld
Oo0o 0 Coa
 p l ta
hepae a Schedule chonges un w
sm 1s o llowing Balance shuot

Balane Shaat

999 199
iabiities R RS Amats RA

50000 So000 Fxad aseu 18o00 29 0 0

Share opital
Investmenta
o/ Debentuaes 10,600 20 000
Non - tAadunn toooo 1o000
Bi s payble 19 000 boo0
TAadin oo0
Outstandung Rapen bo60 0 0 T nvehntoris 12000LOOO

Taadds Ceditors& 33 000 40000 Taid Acbtors 40000 qso0o

Acchud
niteest beoo

neapiAd
insonce 3000

Cash a bank 9000

Cash in hond 8oco

es

F,I7000 2s000 700 25000

 Solwtion

Sehoul
Scheoule chons n wonkn Copital

Changgs un won 9pi tol

ocs ti uas
RS Deco2
P R

CwmentAmal
Invastmats (Taadi Bo00 000 000

InNentor iAs 12000 6o00

Tads Pebtors 4 000 ARO0O 8000
A couns intuet 4000 bo00 2000

UnepiAao insuane 3000 3000

Cash a Bank 2000

LSeO

Cosh un hond Bo60 L000

7000

Total (A) 89000 7000

Cwnant iabiuties
Bils payahl booo 12000

Oufstandsng Ruprses booo

3000
33060 40000
7000

Total (B) 5%000 5t000

wrkng otital (A-B)32000 32 000

Toaase un wrkung
Copitau

32000 32-000
000
 Vou a askeo
Conpl R a p ug op?ta
State mcnt th
om
follouwng dobaiL

-1-1999 3 -12 -199

Pastiwals p

B7. pehontuLs 40000 40000o

8000 12000
outstanslng ant

Cash Jin hond

2 OoO
Cosh ban
20000 26e00
accoun pyab
lbo00
35000
Mocuna{
Accont waivabla 30000 34060

Paspad Commsim 200

nventori 2 2 000 27 0 00

Sha pemiu I5O00

So o00 SDO00
Euty shan Copita)
Soluhim
workn Copi tal statinot
chone in wask Copital
on ti culais -1-931-12-93
PS IncnaA PcAg RA

C ent Amst
Cosh in hand AO00 8000 4000
Cosh un bank 20e0 SDoO 3 000

Accouna Recaivabla 30000 34000 4000

PAapaid Commiss' n AO0O

4o00
nVenhor iLs
220609000 5000

o t a A) 72000 24 000

Cned iahiutos

outstondung Aant 8 o00 2000

Ao00
ACLOUunA payolu 20600 2bo00

Total B) 28000 38000

working opitol (A -8) 4400 46000

Incus wking 2000
Capita 2000

aee
46 000 46000 booo 16o00
 Caluatt unds om bpati uns un tusfoloiing
Paoft and Lom Aecount

Pati ulars Paxti ulars

To Adnistaatin 2 00bo
By 0 0 PAo
&Sdoo
RpenUes
By Intet m
TO 5ung epenjas lb ooo nvestmana SDeO
TO a p s d atiun 26o60
By 2 t n saa
TO D on 4a mo ne
buld
To qoodwill waiten
TO Dis Lount on i u e

dahantue 2 000

TO Nat PAofk 144060

2 24000
2,24 00
Southun
Statemunt Bhouwi Funds m Operatios

Pas i lais P3

Nat proit pe
0
Pt Lo
ACeoud
Add Ttems whieh do not dauea
unds ho opuahtns, but dodi tad
to P L AlL

pUatim 2% b00
o n 6al bldin
6000
yood wi witten
5D60
Dus cons un s u dohailuu

wittan 2000 390o0

9 3 Oo0
tpms wich olo not
inuoMe
undson ptathms .
bur uspdstad FoPLL Alc

TntaRst on invAtmsna

PAtt u
sab machiney 000
000
Fund um bpeaHun
 1

the
fotlowing alance iher
menaie Atalement sihowin4 louw
unde.

Balance Lheeh

ialiliiu 512 q211242 ASsel 311291 12la2

R R
sharte carital 2,00,00O 2, 50.00 Land FOcOO 66c00
ReTauned eainigs I0,000 23000 stou 80.000 a0000
Cnedutoy 10,000 H5,000 Debto s 1,200001,150c0

Cash 2000 H70

2,80,000 3,18,coo 2,80c00518,coD

Seluiliorn
Funde Flow stalkmant e1 Th yea endirq 31|12122
Parliculom W
Sounce o funds
Furds om pealuons C23o00- i0.Doo) 13.000
o Shaws (2,50,o00- 2.00, O00) 50,000

Total Sowices CA)

63 000
Arrlicalin o Funds

Lard ruwchano (b6.000-5o.Coo) T6000

Total Annlicalions C)
Inow ae tn wonking cautat (A-B)
 Funds
Flow alemer on the ean erdirq 3il2|1992

mesa

utCRs oFuncts Arrticatiorns 0Fund R

arnmarate:mn

Fundsomopeidions12,00o Land nwithabecd Tb000

C23000- 0,000) b6, 000- BD, oOo]

Tbue oshaes 5O000 Inueaing n onkun

C2,50,000- 2,000oo] ATpOO
carital (b.f)

63,000 b3,000

babu & Co pmescn the oluin

Fnanial Atalemernk or 1988 and 98

Pnopane aa souvtces and ylueatorn Find6

htalement.

Balanee Cheel
1488 1989 AGseli 1188 gs9
Halliliis R
pills rayable
H52000 6,28,000 Cah ,06.000 60,000
Cnedutors
8,2600012,54 o00 Tnvtsiment TA,COo
Loan m bank 12,00,000 ,1qaw Debtorns 6,12,000 t0,5h,c00
RUsenves and ,8400017,28,ccy tock 8,64000 13, b6o0o
&unplus Net Fixed asets 22,2h,000 2TL 16.0c0=
hane canit al 12,00,000 1209000

HO2000 2,8tcd HO,62.co0 b280a

Selulion
Bbabu &Co.
átatemert o4 SouwiCRL und Arptication of fund
fos The Hea I989
oraunme

Panliculas
hmm

kows o jurds
Funds om onunailions [W.N. 7,22,c0o
LOan taken om bank
L4,TO,0aw-2,000c0 2,10,0o
Salo Investmorts
1,Th000
Total sowites (A)
1,66)00O
Arylicatuons Funcl W. N. 2
xed as4at ruwrhased
2, HSCO0
Total
Aryulicalions C)
,4S,coO
Dnciease NOnkng carital n-B)
2,18,co0
W.N Adjusted Pret and os Account

Paliulas Paluculavs
Tosermeciatioo on y Balance bjd lopenng eweS
ized 06405 B,T6,000b and swylus 13.84.000
PyPad ane c/d
drsigg neseves s bup,29,000 unas rom perations [ein .22.on

21,06,00O
2,6, 000
w.N. 2 Fixed ASse Acount
Paslcudas P. Particulas R
To Balae bld 22,26,pobPyPerecialicn 5,T8,c00
To Pank fputhose) LLl ,.000y Balance cld
27,16 00O
3,14000 31,74,ooo
 he olowin ae he Sunmouisod. Bolon

Sheet S o Halan ndvstriesLEd o

3SE
Decemb. 198q and 996

Balance Sheet
989 990 199 190
AssetsS RS
CapitalL: Fixed Assets 40000
7Redecmable
LeS
Preeonce DepTeci akion 5000
ShaaaeS IOO00
3oc00 25000
Eoyuity Shaes 40000 4pvO0 CuTert asseR
Gen a
TeAeve oob DebeoTS 20000 A000
Pro 2 LesS at loo0 Scock 30006 5000
100
Prepoied
Deberiures xpen Ses
00
CUTenE Cash
iabi Kties
CYeditoTS 000 HOOO

3000A2OO

divided

Bounk cvedry 12
500 6800
1500 8goDD
 Poepae Ci) Stok mer Shouirg chon g Ro
the woTküng Capital

C A Statemen? o
ppications o Jords
Solution
ci Mal a nduseries Ltd
Scatement Shouwing charges in wo1 kirg copitad
doY the e 1990
Chanaes in
worrking Capib
Pant'culavs. 1Qg0
neYease Decraase
RS
RA
CUTTOnE Assets
Dokors 20000
AOOD
SCock
30000 60 5000
Prepai xpenses 300
Cosh
1200 2500 23 60

Tatal CA)
515006300o

CUTert iab?,tog

CedtoTS 1O00(1060
Provision o o 3000 A00
Po Po ed dividenr
Bonk OVadra{E
12600bo0 ETOo
Total CB)
CwoTkin Capital
CA B)

nCYeaAe in
working Captkal lba00
16200

5o6
1260

Malar ndusEries Lto.

Staate ment SoUTCOS und CPPhcakionss

orhe e 1990
onds
Fanticulans Ra

Soumces o ords
Furds om opealions Cw.0.T A O0
1330e o Y Redeenab le
Preerence h o S

PeSve Odeoen tujes CTcO0- 6ceo) O00

Soles o tred assets (AO00-4O0c) OOO

Totol onces ÇAD

Applicati ons o ords CB

k i capital
CA B)
wovkin Dote ()

AdiustePd Pot and loss oecoume

Particulas P PotiCula P

TO DePreciokion on Bt Baonce bld

i ed CSsetS B Ponds r o
Ci60bb -11,OoO) A00

Balance cld Ceo i 3

6206 5206

Pasticuls Prepaxe
yom the dollowing
Statement o MRaan

e ords lou
y e0 1998
dor
. 1998 31ta1993
Roo o 18o
Cas

pebpo>
1a Soo
fcek
ond
Building &Soe

eoeoo A300
Modine

CxodFo 20sDe

Bank ton (tong.

ons coikal stooe
 1
aung aopioko M-Raan
paxnal tse. amounfod lo R
13,c00. pxovi 2ion Y
dapxecialion moeh neuy 9to od at R R35oo on fan1
and Rs 18oco n pe 3

urds Hous atokrent yoxy20 18

Po la
So Ces und undsJm opeation
Ponk can aksn (2asc0-
Soco

Tota 8osue (A).

APplisuo Junds, 1oboo)
Jand PUTOhaAed C16eco-
seo
Buildir Pnchased (2r5D0-2ro)
600
Mach'ne PUTchased Cww2)
Diouwt O oPrietcor
TOtal APPiCaon Ce) eeo
500
DECseese 2noIkhg CapibalCAB).
WoTki3 Ote3!.

Staleen

POtiuRars R
Clo Ptal
Add /O 5

1ess oper ecepita

Ne P30t o h a
ASS,Dopietiqin0 machinext
8 o ) - 12,t0)

Fund TOm Pexats

W -2
Machinen Accound

Particulas P Parkiculoss R

To Bakanae bld ACO00 B Dep Yeciaio

T Bank (Punchouse C1g000 - 1600)
Bal a
B Balance cld

4T500
T600
 A

Balance Sho ot GGnah Milh 14d.

113
I9Ci2 O2
iabiluties A3sds
RS
21Foo00 300000
Cquihg shase capidal 3/00000IO0jotb Buildin
07. Redomabb
Machnc 3D6iod32000
Pre shCUo apsJd 2,000
FuJitu
Capdal nedonphom
DO006
Stock 30 DCD 21Dr
Reprue Fund 2 00ODdt2000D
D0DDDebltaa
shoo pxomilUn HDCD 2,0DD
30D0D 3000 Cauh od bcn
Pvo Fit&HOSs AlC
|12o}0bD 20t034D
27. pekontuoo
200 00D 31DO0
Csodito

I300 27tpa 30tt0

TTo fbloto un 1UTDacton 1DD& Pdoo drtng tho yeu

q03
Yodoon@cd ad lo Puumum
p Rs 2DrboD luronjeoto b sOeoe tael yomP L
AC

C1 rords ( botk vollo

Ps-nDIDo0) Wem SoJd
RS TDIDO6
ddDepJRTIOion Purovida On Busldino MOchiyoTdnd

FLuertt uAD RS.201DDD RS. BDIBO6 Ond Ps,2100D Opectiudy

eOvidores Paud Ps.50/00 od

PsoPObo ea Fuda Flb Slenod Showi ne ChangoR

in woudking Capad

CronQah Milla Ltd

Fundà Fow stubenod foJt tho yuat 19033

Pov iculova RS

SOUTCe ot Funda

Funda o oPeradlb n Cw 4AD 2 Tib06

TSSUD O euladhy StUC CHDDOtD-300)|ioDo66
SSuo > dohenduwxa) (31bopdb-2tbo0
Sao o tODdmds ToroDd
To o Source ¢)
APRICd iOn dunds
PSD Forore shto edoonoc 200DoD
 21

PoR nim on 19domption 00/b00 b

201tb6
PUSTC haR o duilding Cwto 2)
Pore haD o} Mochinomy Cw n3
pividondD Poid

Totl APPdCot ontB)

52DbBo

Adixumop hoft oid Loss Acund

PostfiCuwayo RS focticadtoea RS
Tb Tortajot to TOgde Furd|2broD0 ByBodonco bd \2000
TO Poonisum oh Yedcmpat on By PToFt on
Suo o
26tD6

To loT)
PopSOCiadi bn oh

Buldng 261000 CBOl Fro 2r1Do

Mochisuu)
21600
T6 DiVIdonds

T 8adOnco C
35
 99

-2
Budinp fCCou

PavckicudOD
TO BalOnce B Id
256DDD
To BC (PurchU) CRulF TOItbDo eselancecld 00cOs

312605

0-3 MachauDo HCcud

Pouct 1culve PS Potico RS

Tb Bolcrce bld 310DOOo BDRDciksdibn

To Bunk CPLOrchao) (Bulry ob6 B eudance cld 32016D6

5DIbD6

915DDOD 3 501DON

Terods Kotud

POJi Cul PwetiCulo

ToPolGnCe Bld By Bank Csa)

T B Badanco cle
P>L Alc (Profit on u5brDto
Sala)
C6rDo6 - ADDbo) 8006D
ADrbtD
21206oD 2 bIDOD
r
h ollbwi n Balo ne ShaalA male nd
G) StaArmud warna Copi tol
G Funeds flow Statamont

Balo m heet A l h Ltd

12 99 2 1993
abiliti Ammta PS

100 DO6 3 0 0 00
Auty Sharlapital 3r00.000 4 :00.000 Cqoocd twil
Land B u ldunaa 200 00o tt70L0
87. Reduemable
S0 0 0 0 20000

Pa Shaas Copita 1 toooo 106I00d Pl ant

90 000 30co0
Invstmantu
Capital ResAV.2 tOib00 20.000 n
3 0000 SdI000Debtrs
t4o000 170 000
Cendaal RoARAV
Stock 7 000 109:060

Pait p LOw Alc 3oI00D 4s000

B i eLaivabl 2o060 30000
Paopoad dividana 42000 in hand 15000 too6o
Sundau CLedi raA 2SDC0 4006
Cash u bank to 000 S000
90 000 6 000
Bi Paya Pa u nau

EnpensA RnponKeK sd00 loo00

OutAandin 30O0036000

40 000 SO000
Provision fo to
67000 817,00 677:060 8,17000
Soluhun
SHatamcnt chongs un
workuy opital f
ta yeax 13

Changes n wakiy opí

191& 113
Posth ulos RS Iniaa

Cwond AMea
140000ZOrO0 30000
Dob tor
77000 :01000 32,000
Stck
BiUs Rawnable 2 0000 30000

Cosh ir hond 5DoD ODOO

2060
Cosh un Bank 10000 8o00

Total CA) 262000 3270b0

22000
47000
Sunolur ueaiborA 25D00

20600 booo 4006

Eponss Out itondung 3000D 36000

total ( B) 75000 000

1¬7:000 2 2g/0c0
ook Copi tal( A-B)

Rase un woskn
Copi tal

D2800D228000 bro00 7600D

 Funds tlow SAatemant
fothYaas 199 3

Paseti culors

Souaces Funds
Isu u t y Shoe
400,000 3 .60 0oo 100 000

S ale land 46c00

(w N.2)
1b000
Sal Machune
Sivi dand cm cinvAtmont (w n.3)
(1000 +2/000) 3 ob0

FunlA m Opoafioms (twn.1) t930o0

Total soLeA tA 3 460oo

Apptotium { und
Phaines dhakAadacmod SoI000-I0010) Oso0

PAoponed davi dand pad 2000

a paid

Pant PUnehased w N)
Intwim dividend Pad 9o 000
Ihvestmsnt PunchaLo wN. 3)

Total ppaLatim tB) 3.6S000

vokg (opital.
wokun not

Adi ust ed psoit nd o.3s Acpcent

Pasti culars Paati cwlaA p

o TAana to gentio By Baona bld 20000

50 1000 -3010 DD) 20000 By piueland Aateived

TO Paopasd divioanol SDI000
C3000 - 1obo) 2000

TO Endeim dividsnd 20000

50000BY Fun k u
TO PAovAion fo tox 9 3 r00C
naioms
TO gadwill wattan k
(1,Oob0O - Bocooo) 201000

TO u mi na exponss
0o0 -fo Loco5000
bui ttn tt (lt
TD L o n A al

Plant r o 0 0 - toroo6)9.000

D a p r i i on on

Plant 10 000

To baloa eld A 000

2.2T000 2 2 OO0
N. 2
and Bludnga AcLo

Pantiulaas Paatiuuars P
To Balona bl d 2 00 DOO
By Bank (salo) 40000
TO Opital aosexva By Balona eld 70 DOD
Ton
o006

&10,00 0
2:10t000

TvAst mant Aceocun

Partiuulars Putiula P
TO Balane d 20 000 By Divi dends 1060

TO bank CPucha1 o00 By Bala cle 30000

Ba.3 3000 311000

PLont ALcount

PA Paaiccela PA
Paxti udas

TO halame Hd 80r000 By Ban (Sale

By peLAle(om um
To bank (puchae 2006
Aale
42000 By Demed ati n

20010o0
22 (06o 13 Balaea cl 2.22 0o0
 Can
alno be 4s6tertairnc
Fundo om eperialions

follownng manne, yby rerepoun

Atatement
htatement houing9 Funds on 0urptis
for the yean

Paru oulas
Q
Balanee 05 at the The endof 1994 60,c00
PLL Alc

whth do net deohente fundsfom

Add: Ctem
qenations,bul debilid Lo PL AJC
Premium on nedermptibo oPne. hanes
o gener neseiveLHO,00030.000 0,o00
Traser
Gocrdull wrullen eh [20,000 - 12,00 8,ooO

Pneliminany eers% wulion LbOoo -to 2000

Depreciation pLovision Lyo,ooo -25txo 16000 H5,000

I,05,000b
lab:Ttems hich do net inoiease Junds fom

openations but CrecliTect lo PL AIC

Inume from non fraduind investmen 20,000

P AIC Palane as On -q bo0D 10,000
Funds om punalions
b5,000
 oltounga osna
123
30 Juns 21 are 20 ura
Co r d .

alanu h o

30-6-1a27 3o b-19 3o--733

AS3

1go.00o 2000do Gusoduu 4oD

Shao CcpRio

3b,00 b Cuding8 2000o

23.00
3.00
2ADO o Nachssa
D. 26o IVAJAMard
200o0 20oo
Tasds Ckuditas
2.bo o nionàmuy o.od S0,3o
l2,4oo
Ban- Dsdaaq

32,00 3,200 ADo

Tocxoden

doudus d o 380o A200

311200 |31,6oe 3,t 200 3,11koo

Troodun
psouodio hogeo M
aLlny ooo and

2 oo
n taiAuras
od hu es. 3oo
es. 3o0 6
f1r u imans cuun

dununa
8)a Aodoroons ahanags n oxxnaORia
a RurdA
 20

Paxura to Lscd .

chaad Oikiq

ahans pefan@i
30-o-1 3-b-148b
PougRculos

uand.oris 200

AA AO AAOo
ADDO0
T209
0 ADo
13200
,20o 25. bo o

oo 5 2 0o

t2ADo 2,boo 9.800

3/200 A 206 AbO

Toal 32,200 1Goo

oakinq cogia0
81,00 oo o
Copos
,0%,000 L02000 36.boo 34.boo
439
(.Ld

ands Flou rlorrund

Poxdfuims

SOecos
tunda Em epndub) tw.N ) 62o0o
Salaa înuutrmons 3oo0
20.006
TSSLLL o haJgs L2 Do,000-.20bo
2 0oo
HpnRodir a unds
NoLnrosy ca3Md
Tnusmarti pUhaAod

8uiord Doo

Taoe
TOkas AppAfcadus )
 uuadnona AicOund

Pudfeulcas ebtesinesne

To Badanta b
20000 Ran (ala)S 300 0
To Ban Ruochai Bas. Soo By Boano cld 22 DoO

ooo 25.o00

en

PauarculSs Poxiiculw
Bo.000 By Calonts le lda 32,0D 0
To Balonro c & 3ADoo
CpLOLso mad)
bADoO 6A.O0Oo
waTKirg No
Auoun

Partscalaas
a a nnca bld 3.00
C36.00o 23 000D
By nda Zaoro

Toopaunio on Bastdney 2.O0o

5.00o
To
To
Atod
C2A oo6 2 o e0o)
32 0oO

.O00d

NprrinDy
ordicuns Pofeulas
Baians b A,coo Dupaacfasn 0.0oD
B.D0o B UDNES C/d

B2,000 32s00
oeng
 CASH Elou 1 MEMEN

om he olowing dal you avod tcalulat th

Cash
Cash m caaiions. fun om oronauons o R yea
198
08 R -8 4o00. cnent e and abslvHes a on 1-1-94

ond 2a-12-98 wexo2 as l o u ,

1-1-92 31-2-8
Tsade d lous 82,00o
TRode debtons 315,00o 3,15,0oo
l s eciivalble Aoooo 35000

Blpayable 21000 21o0o

Tnventoties 8500o O00o
Tade Lnvestmenk hoooo Tooco

outstondirg epenses 2o00o sooo

Pxamiseapnse Goo0

&kakement cash tom opexalions

31-12- 298
yeas anding
eas

Pat clas RS

Funds h*om opdion

Add: Tnxease in Cuotent LabiltHas
Tode Hedilons 2000
Bl payoble A-000
atskondng ezponses
ecease in Cusxent asset
B7H& eceivalle

Inventcaies

a5o00
ess: Pecxoason cweont liabslhfes
Tncucase in C ent aset

TNade debtors h0000

T Xada Invasbmanz 20000
Poapmid ezpones 3000
3000

om t
olouwing Ting pue and los ncLount

Wavei Hdyou a o x a j i ed to ascoitain Cash

em opoMalions.
Tdingpuadat 4 lass auount Ha erdtrg
I-3-
Post feaus R PaHHla R

To Cost o goook £old| 24oooo By 2alees Aooooo

TO Greocs ot e booobo
hoo Doo

To stakionay booo xesP 6oeo0

To Depecialion
To 8alares oooo
To os on gal neshr 2coe
To RenE +Eaz0s 8coo

To pisCounE on Ts ue 2
hooo
debeñuw

To potoga 3ood

To poAsion da fax locoo

To Propaged dvidendwo0o
T3000
TO Net p e
booo
 stotement showing cash Jxem oponaHon or he
eroling 31-3-n.

Net po?t as po p l 130co

Ad Non cash and non
opralung expensps
and oses ole Led to ptalc.
epccealion
Os on sala nvesfments
scounE en issue deberuus hco
Provislon or kax
Poposed dfvident LOOOO. oo0o

Funds eM Opexaluen 2ooo

Add Incxase n Cxent labltkis/
deraase in CwmenE asseb' t23,coo
ess: Pexease cusent Jsabstes
inucas cuoent assek 3oo0o

3 Ascoin cash
om opeadfons uom
se fi ea hAaom
Hhsolung balance 8haes
altfe 1999 8 999
Shax Capal2 9o0wo atligsat cost|3cooeo 2000eo
debertues 200c00 coomo epxocaHon thoun C2ooco (socoo)
Genetal Roewe | looawo thoooo Machiney ot cest|2ooooo|2hoco
p4 ale 90000 Joo00 peecialion Moueon 30000 55000
Tade cuadikens hooooooo closing StoCK thocoo ocoo
e poablo 30000 o o0o Tode debkois |Joocco 3cocoo
aststandha ap L000 200o eash at bonk |4ooo0 6tooo
30000 to 62moo 30000[tob2o0o
 nstod
Paotfclaus RS Paclaa

To TxanaJe to genod By balanca bJ 5ooo

AO00o
ClHoooo - tocoo o

To dapacialon on'. opráuoo

Buidings (socoo- oo 30ooo (Ba
Machn ey (ssoo-3ooo soo
To Balance e|d QDooo

R1Soo 15oco

Skoement c o a h om opetoalion o 1999

Poculans

unds oom opxatoo 6sooo

dd:Tncxeass n cwunt liabilidas
Tode Cadakos (tocoo -Hooo3oo0e
o
utsardirg expansas (ldeoo-(ooa) lo oo
Decease io Cxent asret
3a0e0-
Les ReLHLase in cuent Jlasl1hes
B1l Foyable (30ooo-o oo0o

closing Btock (2bocoo o0oo

Taade debou(300000-coo0 looooo 2oooo
33000
A som theolawing loncesheels o notvird LLd .
popoe O Cagh u w talement

89 90 Ases 89 90,
Shae capital Hooooo yooooO Cash lboooe hooo
Tode ceastkors 0000 pebtou 24o0oo 23000o
boooo t800oo
Pugh+Lossale 0000 hbooo SfocK
and (300oo

5bo ooo6360oe boooo b,3booo

Casn tow salemanE o f a yeat I 0

oFoninaPaiula
RA
balance2 e eas
Add: Sounces Cash
TL shoes (Scocco-kooooo)

Total Lash avallable 6oooo

es APplrcatioo cash
Cash out ouo n account
pauajons (wN. D3hcoo
Putchasa oland(132000 oooo 32000
Total appicatu00 bloooop
closing aaance Cash. Avod
N.

unds Lom opexaHon (Hbooo-2oc0o booo

fncxnae in ProjtE

Pdd ecmaase n debtots (aLoco Bo

pecnaa2 in cxoaitons (Ihocoo a o
36o0O
oooop
Inase in stock( t8oooo -l6ooo
oooo
Cash out louw an attount opolatns 34oo0
Srom tfooloungbalances shocs onon 31-12-93
and 31-12-92.poraa.
a
cashow ktatemert
donce. shao
t993
Psek 3 992
abiltRes
tooono
Sh Capital
5o00o coooe #od asssl 1Soooo
Hoooo Soo

Px 4 tos ale.
oo Sto Socoo 0000
Gonaxal Rese hoooo
Soooc PebtoLs
6 debenueos Cocoo
ells Heednable occo30oco
Cxadtfo hoooo 3oo0o
Bank

cuttondina ep LSOoo locoo

38s0oo too00

aash low stdamant o d Hea 93,

Pasufcubrs RA RA
balance at bonk tooo
openina
Fcd: Sowtcás cash
ua e shaxas tSoooo-looooo
Ta dekenlues (&ooo0-Sbood
Toal sounces

Total ash awallalle Toooo

Less APplicadion cash

outlow.cash n acuat opelahoo 5000
Pnchase xed oset Cysoooo Goooo
totAl appllcaluo
1oocoo) 550oO
Closing balance at onk
wN.I
Aluatad p t + Los otount
Paol tula Toxllcwax
To TRasey o qenoial oo0o
BHarce | FoDo
Chooo-3oo0o) urd em
opnalion 5000
To ouhl itin Loooo
Cbal
To Balance cd
8o00
0000o
loooos

8tatement cah om operalon

iula R RA
Tunds om opexlion (ho.Na) Soooo
in cwrent Jalslrises
PcddTnL2aLe.
Coad ou Ehoooo -3o00)
oubskandung expenses(isooo- loood So0op

Decreaie in Cuslent aset

El eceiioble(3oc0- 2c0o9 Low oo

|Le Incxeas in cuoent asset

o k (eoooo-oooo) Goooo
ebtens (eoooo owoD 3000

putMo cash on artount

opxauon
2
 Preparc Ces lav
xBatenment Lo tollouwîn
6
a n d adclitona nformattn
Balance c8lucts
Ma Turumrlai

Balancu Shet

Lelleti Rs Rs Assets Rs R
80,000 Alooo|Land BulaPngs 70,oco , CO.o0o
Capftal
30000lant Maciuney 35,0oo 20, 00o
han m SFc

Bank oetdaojt Goo00 qb,c00 ustos A2, 000 58.cco

A2,000 bo.cooDeltors& 30.00O AO,00o

Cudteu
22.00
Cash
outstanaiy npanae 8000 1300o
24D.cco
10,00O240,o00

Adaltonal Laka:
1 , Ma Thumalai dold
a

Ouulng ya
Re11,o00
(accumulatol deprecdticn
Machin costtng
acumulatA
The
Thae s. 3.oo0) foa Rs. 4oco
and Macutner
wa Rs.8.oco
dpruettfen orn plant
ond R. 12co0
n 3l 12 &

anet loss
Aceeunt csiouuo
and hcss
2) probet
Tt« ean aqn
R 2A 000 r
Solutten
Cash FLow 8totement Ma Tuirumalar fo ma

Pazttulass
Opening Palancis
Cash 15.000

Bank o ueaolrajt -O,coo45coo

Adod: Sowrcs c Cash
Kcon ban SFC 30, coo

Sale e Machne

Tota Kowus 34.CCO

- cobo
loss: APPlcatPons Cas
outhlo Cakh on aceunt e cpaatien 18oco
(wN 2)D
Daauwings (WN 3 ) 5o00

and BuiXangr pwchaes (1,o0.cco-70.cc3Bo 3. cc

cosin Balaces
Cash
22.co
Boun k Ouea d a a t
Ab.coo TA.Opo
Woak?ng nvlis

Statement houwPn unda blom OPoaHes

Parttculais
Nit -24.co
-

3coco-
Add: u s en aale oMaehi'nay(u1pe0
A CoO
Apssaton m Macliney (w na) oo 11,oco

-13.oo o
Qutlo opunds maaccaat fep1a.na
Iw.N 2 Statenment o Cash erm oReaatfons

Partfakars
Cuthtou efunds enaccount perata 3 coo

Add Tncaast un cuven L a l t l h

Credito lCo.oco - À2oco)

13.ooO
Outstandmg pnes r3co0-Scco) 5OCO 23oO
ss O.oOO
Cuarent As&ets.l
O t o s ( A©,coo- 3O, cco)

Tnnestouies ( 580c0 - Ao.cco) 29 cco

Soo
Cash ew o on account of OpeAatou - tSceo

WN 3
opening capYtalt agits cloxtay Capttu atinas

TDAawrgs- Ts IB,ce
|w 4: Plan Machireny Account

Partulars Rs Pantiulazs Re
35. DOO Cas b (3al) 40O0
To Ralance bld By
Ale (aaes)
Ruy PL
A 0O0
C1coO- 3poo4poo)

By DeprvcPaton

ByPalanee cld 200O

35oObo 35 ooo

Leletaoton
Bolance 8heef" eh MIs. Black a n wate as m is J a n

a13 nd 3 Decc w as follous

a 3 3112:913 3 3112 93
Assits RA
kakilh RA

(edtos
A0,000 A4.ooo Cash tOoo

Debtons 30.coo
w t s Joan 25.cco
Stoct 35,coo 25.00O
|hoan rem bank. Do0 50.00bo
Maclneru
Capltal ,25.OCO 53.cOO
anol
AO.cO BOccO

Builcia 35.OO

2,30,cd 2,7. cCo 230.OO | 2.AT. OOO,

Duofng 1t ran Mactuin Cost Rs.1D.coo

taccumalated o a p r e iaton Rs 3 ooo) was &olo fon Ra.5.ooo
as
Th paousíon o Aepueuntien againa MachPnery
st Jan Ia3 was Rs. 2 600O. and on 1stDc 1993.

Rs 40ooo Ne Proht 1 a tan tn9 3 ameuntal to

Rs 5OO0 PARPae Csh l w tatement
Slutiem Ms Black and wlite

Sgtatemont fen tt ar eroung 3/Du (143

Cash hlow

Partculars Pa
openin e cash
Rlance

Adod: Sorws cash

Cas brem Operatfons ( WN2) Sa,o0o
Lwan iem Bank (5o,co- AD,ca ,cco

Sals Maclinay 5 po0

Total 8ounces

p s Applfcatfèns Cash
epaol 25.00O
WAtesloan

Daaw fngs (w N3)

(soo00 -4 o, coo)
a n d pwchasecB
25.coo
BLuldig paelaned lbo.ooo-35.cod
ToBal applPcatfons
closing Bolance Cosh 7000

WoakPna notes
Sloterment ohowing Funols Fom operations.
W 1:
Porttularu Rs

Adol: epaeciatien en Macuinay ( w N4).

8000

Loan on Kale P Mactuneuj (w N 2 o00Do.c00

-unds om operctens
5.00o.
 1
W N 2 Statement f Cash rom 0peation

Patulass R
u n ols% rem Operatienl w ) 65.cco
Add: In avas editeu h.cco-4o.co
eeass u tocA ( 50oO - 25, Ooo) O , oobo
14,00o

7.00O
n Oease in olatoA8 (so,Oc0- 3oco
20.o0o

Cas h lem Operatins

5,o

WN 3
Opennq Capital+ Net p a o ? - Cosirg tap4a aat

= ,25.oo0 4 5.coO-53.CCO_ R . Iooo

awng Rs ITO

Machinery A Ccount

Pantiulars P Parflas
0.c
TO BaRane blel By Couh Sales)
y PLAlc (2o3a en Sule 2000
( o c o - 3ooo Seoo)

B pruciautfen(R 18o00p
B Blance c

80, 00O 80,00

 NetatrtOT

Malas t Fuua yru t 4ollnusg

aa Hs o s eduig
Balauc Slueb
1985-86. You us uquuucd
1 t Du. h
tatnurk oa
ca
CL
Cash law
Paepars
Z) 19 -
1986
euded
-

Balanc Shets

1985 986 Psses 1985 1986

abilites
R. Rs

ghanr 20,000 o,wo G10ocuwll 40400

Capital

8 cco Ao
G1anva s e k ,803,boauhe

Proi ano los do,boo Buuldiu

Ale
,0lwealuuontsAoco a20
Bundhy &ditos ,boo

outblondeiq 40lo uvelavier b,0oo4

4.do
enpense
 3oo ,bod | / s ecumhly 4 0004.A40
Jax

8o120Bauk baalie 303,040

bad dahb
3,12031. 1bo
3, 120 31l6|

Fallaww addiusva aluan has be

Supplued
i)A PAe of snd Los aloo beus Soldon
Rs. 8o0
epaualisu amonluuy R . 1400
ou buikhiney.
a s beu clhargecd

i) ProVAsLOU o analon uas bate

Made oR. 3, Boo oluuhed a

Soutw
Cas Flow staktuaut jaa ta t a
enelecd 1-12-186
 Peurtiatlars
0 pu Bank Balunte I,3R0

Aolel Soucs aash

Cash am 0pemten (w.N.2)5.20
300
Sals o daud
Tala Scuwes
840
Tota Cash avaikable

Los Applicatlene oCaah

Buddhg puchased (w.N.4)1,2
lwgatuts pwuchasecl Q00
2. 20-.cco
Tax Paicl (w.N. 3) 3400

Tau oprplica tons

Closu bank oaute 50 AO

wwukan halis
w..1:
helyuabd Prolt asd lons Pecut
 Porluculas R Palucu R
To Tnauala o
bco Baniuce bld .A00
3 , bov -.800

To AapALcalus ou B Furcls a
11400
OperatDons
buldug h400
TOPAOValo o leo 3,80o
To Bolanl ejd . bco
8. boo
8 6c0
W. N : 3utb t o Cash hom opexhens

Partidars Rs Rs
Funds om opesaliau3 (w.N1)|
Add: 1uokasA PAo VAslov a
oeubya dabb lia0-30 AO
e n e a s i iu lweLto3les
1,320 3to
b,ooo- 4, b8o)
b7bo
Less ecseast ù buclito1s l11beo-1,pax) F2o
Penas Ou Lseunde expese
peres

4 0 -lbo)

414. 4b -4.000 A40 1,040

5+20
Cosh4sm opera llon

w.N-3 PhoVAsuo on tax Aurut

Particulars Rs Pani eua RS

To Bauk (Jae pou 3.400 By Baluvce blal5.

(Bod)
To Balouc cld 3,bao B PeLAle 3,80o
CPAovSNoLI Mecle)

W. 4 Buulcluuy Aceot
Paoluculans RA Paatucuk
To Blancl b/e 400 B Lpnuceuon l1AO0
Baleul e/d
To Bonk (punchane)| 1200| By
(Bai) 8,boo 8.b00
 Fasm Hu alloatbig Balance 3leus a
out t t taleuuud af
Poui 1td. make
Cash ro
Balanc aerts

iabilihis 1989 1990

1989 CPIO
R Rs es.
Fuly shas 3.00.co0A co,00 Greoc! wu t, 15 9ooc
Capla
Land Builduj 2,cc.c1
8 Reclemable| 150.000 1,00.bo
P
Shanr Capla
Pat
40,TOFotoo Debtrs
1enorcd seWe
30o 4 t . w o tock
P&LAa
,0o 50 000 B.ullb eceivable d.wo zom
pAoposec ciuidesd A

Ceeltar 56000 8 3 0O Cashe n ond 5,00oc00

Bills poyable 200 000 b,Coo| Cashat bauk e.mo8.o

Ao coo 50O0
axatov 617%0 E,17,00
 Acleli uove lubrmaiou
a) epAeaaliou o Rs l0,000 cnc 20.00

plesiud acout aud

Jave been
Jcwe cugecl ou

Jnd cuud buldieys accaud sospeiwey

J 1990
b) Au utuM diwidauc) o4R2o.co
Mas been Pouo PO
C) hionLe t a 350 ms pad duwg

Salubicu
Pouu Hd.
Hu yee)
Cas flew slataut fay
990

Pantiaula Rs R
ODeng Bouans: Caa un Jend 15,coo

Cens et baukl lo 0 0 25ro

oloSowrces o Cen
Casshve operciow (wN) 1. booco
 aeq
I,00,000
A 0o Cw - 3,00,oo)

Sale o buldng 3)rres w.N5) 0.cco

Tota 3ouices
Tola Casn avauable 95,00D
ess App.licatious Cady:

Recdenlpbon at pt. Jlees

C 5o,CC0 -,0O,O0O
Plaut pnckased (wN. 4)
tutaui duidad Polc
duiolesc) af 198e
PAopoud
Poia
Tan Pac
Toal opp.licabious

closng Balace3: Ca un lod 0,0o0

Caah et onk
.018.coo
workug nolis

auel Jess ntowd

Pdjted paofd
Pariiculis Rs Pralicu
Paukuuce blel zoco
To Aepseualiou ou lo,COO By
plant
By Fuhcls 13,0oD
To epruciaton Jaiel0
Opeotionw
Buildine

To TsaMa geuaal
30 00

Lo 00 -

40,00o)

To vudeuds:
l n t u i divudan 20 000

Paoposcd cliwudeud 5o t

To paoVSuGU or_ax AS
w.N. 3)

To Ccoclull wute

C1, 15,c00 Y0.00)

8,0o
To Balanu /d ,4.8.0co
 Stolemat cash pton qoeounn
Palcl RA
unds botom opetaluon (w t8ooo
Ad.nvtwase in cocedi Fa(23coo-Rad 28000 2poo

booo
le peelaase 2n l pauplbe (Boo0 o0o
tooeo
moae n e b k s ooooo - tLooco Fpoooa
sote (1,e coo-ttoo 32000
B1k xenablel3ocoJccootooco 8bco
CoLsn o m opxsuon oo0

Polscula Paiedaus RA
To bon (tax pad) 9S0 o Bbalanue bld 4oo co
o alarts d soooBy p eje ovition
made.

8sc0o.
&Soos,

Pax icuda Tooliclau

To balonce. b/d B depoealtootooeo
o an (Puxchass By balane cld aooco
,30t0
Clad
aloooo atoooo
WN.S
land&Builelings Acaud
Parkeulous R Puieulas Rs

To Balaut b/d 2,001CD By Jeprecialuoin| bo

Bonk b e

B Balaua c/d11F0

A00,00D