A STUDY ON FUND FLOW STATEMENT
issue 3

A STUDY ON FUND FLOW STATEMENT

Payal Meshram

Student, Department of Business Management,

Jhulelal Institute of Technology.

Prof. Amar Satijani

Assistant Professor, Department of Business Management,

Jhulelal Institute of Technology, Nagpur

ABSTRACT

A cash flow statement is required as part of a complete set of financial statements prepared in conformity with Indian Accounting Standards. AS-3 lays down a formal structure for the cash flow statement. Cash flows should be classified under the following three standard headings: “Operating activities”, “Investing activities”, and “Financing activities”. The classification of cash flows among operating, investing and financing activities is essential to the analysis of cash flow data. Net cash flow (the change in cash and equivalents during the period) has little informational content by itself; it is the classification and individual components that are informative. Although the classification of cash flows into the three main categories is important, it should be mentioned that classification guidelines are arbitrary.

Key Words:-  Cash, Cash equivalents, Operating Activities, Investing Activities, Financing Activities.

INTRODUCTION :-

Fund Flow Statement implies a snapshot of the movement of funds, i.e. inflow or outflows of the firm’s financial assets for a specific period. It represents, “from where the funds are received and where the funds are utilized” by the company during a particular period. The word ‘fund ‘refers to a sum of money, which is used to finance the firm’s day to day operations and acquire assets for the business. The flow of funds represents the movement of funds, i.e. the change in economic resources, from one asset or liability to another. In this way, the fund flow statement implies a method of analyzing the changes in the firm’s financial position, between two balance sheet dates. Fund flow statement is useful in knowing the changes in the structure of assets, liabilities and capital. It shows whether the sources of funds coincides with its application and indicates the accuracy of a firm’s financing and investment decisions. Unlike the cash flow statement, which is prepared on a cash basis, the fund flow statement is prepared on an accrual basis.

OBJECTIVE OF THE STUDY

  • To study the financial position of sundaram finance ltd.
  • To find the profitability position of the organization.
  • To study of the Balance sheet, assets, liabilities of the company.
  • To study the liquidity position of the company.

HYPOTHESIS OF THE STUDY

  • The fund flow statement of sundaram finance ltd, for the year ending is outflow of cash.

SCOPE OF THE STUDY

The study is based on the accounting information of the SUNDARAM FINANCE LIMITED, CHENNAI. The study covers the period of 2008-2010 for analyzing the financial statement such as income statement and balance sheet. The scope of the study involves the various that affect the financial efficiency of the company. To increase the profit and sales of the company. This study finds out the operational efficiency of the organization and allocates of resources to improve the efficiency of the organization. The data of the past five year are taken into account for the study. The performance compared within those periods. This study finds out the areas where Sundaram Financial Lycian improve to increase the efficiency of its assets and fund employed.

RESEARCH  METHODOLOGY

  DATA COLLECTION

  • Primary dada
  • Secondary data

PRIMARY DATA

The primary data are those which are collected a fresh and for first time and thus happen to be original in character. We collect primary data during the course of doing experiment in an experimental research. It is first hand data nobody else has collected this before. There are various ways of collecting data, these are follows:

SECONDARY DATA     

Data will be collected from the

  1. Company website
  2. Internet
  3. Massine
  4. News paper
  5. Books

DATA ANALYSIS AND INTERPRETATION

Table 6.1

Statement of changes in working capital of Sundaram Finance Ltd. During the period 2014-15

Table 6.2

Adjusted profit and loss account of Sundaram Finance Limited during the project of 2014-15

TABLE 6.3

Fund flow statement sundaram finance Limited during the period pf 2014-15

INTERPRETATION:

 From the above table 6.1 it is observed that the working capital of the company were increased from rs. 8007319.41, in 2013 -14 in 2014-15. The current liability of the company was increased from rs. 51683076.39 in 2013-14 to rs. 81847663.43.02 Coures and it was increased to rs. 60533828.37 crores in 2006-07.

In is also evident from the above table 6.3 that the total funds flow during the period From 2014-15 amounts to rs. 145661604.24 crores. In the total funds 116378.74 correct received from funds from operation, 30933850 cores from issue of equity share, 101682386.11 cores from loans and 1407369.42 from decreased diffiered tax.

Whereas the application of funds 14981639.00 cores is used for payment of share application money, 10291.50 for redemption of unsecured loans, 98531088.39 cores for purchasing fixed assets, and increasing working capital is 321385.35 crores.

GRAPHICAL REPRESENTATION OF SCHEDULE OF CHANGES IN FUNDS FLOW DURING THE YEAR 2015-2019

SUGGESTIONS

It may be suggested that the current assets position of the company has been increasing year. This indicated good position of the company because the firm having good liquid position to the company.

CONCLUSION

The funds flow statement highlights the amounts raised from various sources of finance during a period and then explain how that finance has been used in is

It is an analysis of funds flow between two balance sheet along with funds flow statement another statement is also prepared to analyze the impact of funds flow working capital position. The funds flow statement list out the sources from which working capital has been derived during the accounting period and the ways in which working capital has been used u

REFERENCES

  1. Agrawal N.K- Management Accounting
  2. Financial Management:- Khan & Jain
  3. Sudhinra bhat:- Financial Management Principle and Practices

Website:-

  1. WWW. Chartereclub.Com
  2. WWW. Sundaram Finance.in

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