The points of distinction between cash flow and funds flow statement are as below:
|
Sl. |
Cash flow statement |
Funds flow statement |
|
1 |
Useful in short term
analysis
and cash planning |
Useful in long-term analysis of
financial planning |
|
2 |
It prepared on cash basis |
It prepared on accrual basis |
|
3 |
It ascertains the changes
in balance of cash in hand and bank |
It ascertains the changes
in
financial position between two accounting
periods |
|
4 |
Analyses the reasons for
changes in balance of cash in hand and
bank |
Analyses the reasons for
change in financial position between two balance sheets |
|
5 |
It shows the inflows
and
outflows of cash |
It reveals
the
sources
and application of finds |