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A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
What is a Fund?
Fund
Meaning
1. Money that is set aside for a particular purpose. 2. To provide money for paying off the interest or principal of (a debt). 3. To finance, using long-term debt or Capital.
Synonyms
1. Finance 2. Support 3. Back 4. Furnish
Fund = Capital
We use the phrase "We need additional funds" to mean we need additional capital whether be it for acquiring assets, clearing liabilities or for meeting expenses. This indicates that Fund means Capital. All capital of the organisation whether owned or loaned is capable of being called Fund.
capable of being used in any manner the organisation prefers without any restriction/hindrance.
1. Liabilities supported by Assets : Capital is supported by cash 2. Assets financed by Liabilities : Cash is financed by Capital The next day, Furniture worth Rs. 1,00,000 and Stock Worth Rs. 50,000 have been bought for cash. The Balance Sheet after these transaction would be :
Balance Sheet of M/s ___ as on 31st December __ Liabilities Capital Amount Assets Amount 50,000 1,00,000 50,000 2,00,000
1. Liabilities supported by Assets : Capital is supported by Cash, Furniture and Stock 2. Assets financed by Liabilities : Cash, Furniture and Stock are financed by Capital
1. Present 2. Existing 3. Recent 4. In Progress Current Assets are assets that are capable of being liquidated in a time span of a year or less. They represent easily convertible assets. Fund is capital supported by easily convertible assets + Current Assets are easily convertible assets. Fund is capital supported by Current Assets
Fund is capital that is freely available for use for any purpose the organisation intends without any hindrance/restriction. All the capital that is supported by current assets cannot be said to be freely available for use without any hindrance. We do not consider Current liabilities to be representing capital that is freely available for use, since they are to be repaid within a short time span Therefore, capital supported by current assets excluding current liabilities would only be considered as fund.
Synonyms
i. ii. iii. Stream Gush Course
Funds Flow
Fund being working capital, Funds flow indicates the flow of working capital between two points of time. It involves information relating to the various transformations undergone by working capital (i.e. the changes that have taken place in working capital) during the period involved between the two points of time. Every change in working capital is associated with (or is on account of) a flow either an inflow or an outflow. Thus, funds flow involves information relating to the inflows and outflows that resulted in a change in working capital between the two points of time.
Hidden/Masked flows
When there is an inflow followed by an outflow of the same magnitude, there may not be a change in fund (working capital). An inflow would result in an increase in fund which would be set off by an outflow resulting in a decrease. Since the magnitude is the same, after the two transactions, the fund seems to be unchanged. In such situations, to notice the change, we will have to break down the transactions into two instead of viewing them in total.