19 November 2010
Cash flow is nothing but flow of cash during a particular period of time. It is a analysis tool to make analysis of Inflow and Outflow of money during a particular period of time.On the other hand,Fund Flow Staement shows the flow of money from different activities.This helps the management to make analysis of the flow of funds from activities such as Operating Activites,Investment Activities,Financing Activities.Both these statements are used to know sources and utilasation of funds. Since cash Flow only show flow of money, fund flow statement is widely used.In depth analysis are made by different financial institutions/Banks for their clients at the time of funding/further funding for knowing whether funds provided for Fixed assets investments are not used for current assets and vice versa etc.
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