Q 4. A Funds Flow Statement is a financial document that analyses a company's Balance Sheet of two years to validate the movement of funds from the previous financial year to the current year. In other words, it compares the source of inflow and outflow of funds during the concerned accounting period and analyses how it affects the working capital of an organization. In light of the above statements, discuss the various uses of a Funds Flow Statement. Also, mention if such a statement suffers from any limitations.
Q 4. A Funds Flow Statement is a financial document that analyses a company's Balance Sheet of two years to validate the movement of funds from the previous financial year to the current year. In other words, it compares the source of inflow and outflow of funds during the concerned accounting period and analyses how it affects the working capital of an organization. In light of the above statements, discuss the various uses of a Funds Flow Statement. Also, mention if such a statement suffers from any limitations.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Q 4.
A Funds Flow Statement is a financial document that analyses a company’s Balance Sheet of
two years to validate the movement of funds from the previous financial year to the current
year. In other words, it compares the source of inflow and outflow of funds during the
concerned accounting period and analyses how it affects the working capital of an
organization.
In light of the above statements, discuss the various uses of a Funds Flow Statement. Also,
mention if such a statement suffers from any limitations.
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