Fund Flow Statement Format

What is Fund Flow Statement Format?

The fund flow statement summarizes the source of funds and the application of funds that compares the balance sheets of two different dates and analyzes from where the company has earned money and where the company has spent money.

Three Parts of Fund Flow Statement Format

  1. Statement of Changes in Working Capital: Working capital means the difference between the current assetsCurrent AssetsCurrent assets refer to those short-term assets which can be efficiently utilized for business operations, sold for immediate cash or liquidated within a year. It comprises inventory, cash, cash equivalents, marketable securities, accounts receivable, more and current liabilitiesCurrent LiabilitiesCurrent Liabilities are the payables which are likely to settled within twelve months of reporting. They're usually salaries payable, expense payable, short term loans more. If there is an increase in working capital, then it will be an application of funds, and if there is a decrease in working capital, it will be a source of funds.
  2. Funds from Operations: If the company earns a profit, it will be a source of funds, and if there is a loss, it will be an application of funds.
  3. Fund Flow Statement: After ensuring the above two requirements, the firm will prepare the fund flow statement, which will comprise all outflow and inflow of funds.
    1. Source of Fund: It is used to know where funds have been arranged for investment. The source of the fund can be in the form of the issue of sharesIssue Of SharesShares Issued refers to the number of shares distributed by a company to its shareholders, who range from the general public and insiders to institutional investors. They are recorded as owner's equity on the Company's balance more, debentures, profit from operations, dividends received on investments, and proceeds from borrowings, etc.
    2. Application of Fund: It is used to know where the arranged funds have been invested. Application of funds can be in the purchase of fixed assets, increased working capital, purchase of investments, the dividend paid, repayment of borrowings, interest paid, etc.

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For eg:
Source: Fund Flow Statement Format (

How to Prepare a Fund Flow Statement? (Examples)

#1 – Statement of Change in Working Capital

Now we will see the format of the “statement of change in working capital.”

Statement of Change in Working Capital

#2 – Prepare a Statement of Fund From Operations

After preparing the statement of change in working capital, now we need to prepare a report of funds from operations:

Fund From Operations

#3 – Prepare the Fund Flow Statement

Last, we will prepare the fund flow statement

Statement of Sources and Application of FundsCurrent Year
Sources of Fund
Fund Generated from Operating Activities23,110.00
Proceeds from issue of Share Capital5,000.00
Total Source of Funds28,110.00
Application of Fund
Purchase of Fixed Assets21,610.00
Increase in Working Capital6,500.00
Total Application of Funds28,110.00


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