How to prepare funds

flow statement
Dr. T.K. Jain.
AFTERSCHOOOL
M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk
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social entrepreneurship for
better society

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 First step – prepare
statement of changes in
working capital
• Working capital:
• Current assets – current liabilitites
• Remember – increase in current
assets will increase working capital
and decrease in current assets will
decrease working capital

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 S.W.C.
• Remember – increase in current
liabilities will decrease working
capital and decrease in current
liabilities will increase working capital

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STEP II – PREPARE FUNDS
FROM OPERATIONS
• Add back all non operating expenses to
profit
• Deduct all non operating income from
profits.
• Non-operating expenese include:
depreciation, loss on sale of any assets,
abnormal loss, any other loss not due to
business, amortisation of patent

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 Non operating income
• These include income from
divident,interest,income from other
sources – other than business.
• These include some exceptional
income also.

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 STEP III- PREPARE
FUNDS FLOW
STATEMENT
• There are two heads – sources and
applications
• Sources – increase in long term liability or
decrease in long term assets.
• Application -decrease in long term liability
or increase in long term assets.

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 What are current
assets?
• Which you will use in next one year –
• For example cash,inventory, debtors,
BR (bill receivable), prepaid
expenses, etc.

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 Current liability
• Include BP (bill payable),
,CREDITORS, bank overdraft
• Provisions
• Amount payable
• Outstanding expenses

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 Long term assets
• Building, plant, land, machinery,
furniture, patent, investment etc.

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 Long term liability
• Loan, capital, debenture, bonds,
preference share capital etc.

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 Thanks
Afterschoool conducts three year integrated PGPSE
(after class 12 along with CA & CS) and 18 month
PGPSE (Post Graduate Programme in Social
Entrepreneurship) along with preparation for CS /
CFP / CFA /CMA / FRM. This course is also available
online also. It also conducts workshops on social
entrepreneurship in schools and colleges all over
India – start social entrepreneurship club in your
institution today with the help from afterschoool and
help us in developing society.

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 www.afterschoool.tk
social entrepreneurship for
better society

www.afterschoool.tk