Cash Flow & Funds Flow | PAPER III – ACCOUNTING & FINANCIAL MANAGEMENT FOR BANKERS | MODULE B: FINANCIAL STATEMENTS AND CORE BANKING SYSTEMS
Cash Flow and Funds Flow – Notes & MCQs Cash Flow & Funds Flow 1. Introduction Cash Flow and Funds Flow statements are crucial financial tools used to assess the liquidity and financial health of an organization. They provide insights into the inflow and outflow of cash and the movement of working capital, respectively. 2. Cash Flow Statement The Cash Flow Statement shows the changes in cash and cash equivalents during a particular period. It is classified into three activities: Operating Activities: Cash generated from day-to-day operations. Investing Activities: Cash used in or generated from the purchase/sale of assets. Financing Activities: Cash received from or repaid to investors and creditors. Example: ABC Ltd. has the following cash flows in a year: Cash from operations: ₹100,000 Purchase of equipment: ₹40,000 Loan repayment:...