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International Journal of Applied Research
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ISSN Print: 2394-7500, ISSN Online: 2394-5869, CODEN: IJARPF

International Journal of Applied Research

Vol. 4, Issue 1, Part C (2018)

An importance of ‘statement of changes in working capital’ in fund-flow statement

Author(s)
Rahul Chaudhary
Abstract
As we know that the Fund Flow-Statement is a combination of two words; fund and flow. The ‘Fund’ in narrow sense, is a synonyms to cash, gives brief description of cash receipts and cash payment, but while in broad sense, is a working capital. Further, in detail, we can say that it is the difference of current assets and current liabilities.
Working Capital= Current Assets - Current Liabilities
Current Assets are those which can be converted into cash within an accounting year, are known as Current Assets. The following items are included; Cash, Cash in hand, Cash at bank, Stock, Bank, Bills Receivable, Prepaid Expenses and Debtor. On the other hand, for ‘Current Liabilities’, the companies top authority is advised to pay debt to external parties within a short-period of time. Further, it also includes some items like, Creditor, Bank Overdraft, Out Standing Expenses, Bills Payable, Provision for tax, Interim Dividend and Proposed Dividend.
Pages: 145-147  |  483 Views  12 Downloads
How to cite this article:
Rahul Chaudhary. An importance of ‘statement of changes in working capital’ in fund-flow statement. Int J Appl Res 2018;4(1):145-147.
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International Journal of Applied Research