Difference between fund flow and cash flow statement


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  Cash flow statement Fund flow statement
1. It shows net change in the position of cash and cash equivalents. It shows change in the position of working capital.
2. Cash flow statement is based on narrower concept of funds i.e. cash and cash equivalent. Fund flow statement is based on broader concept of funds i.e. working capital.
3. It is now mandatory for all the listed companies and is more widely used in India or abroad. It is not mandatory and it is not being used by the companies.
4. Cash flow statement classifies and highlights the cash flows into 3 categories ‘operating activities’, ‘investing activities’, and ‘financing activities’.  Whereas such a meaningful classification is not used in fund flow statement.
5. In cash flow statement of changes in working capital is not prepared as the changes in working capital are adjusted for ascertaining cash generated from operations. In fund flow statement of changes in working capital is prepared.
6. In cash flow statement decrease in current liability or increase in current asset results in decrease in cash and vice-versa. In fund flow statement decrease in current liability or increase in current asset brings increase in working capital and vice-versa.

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