CASH FLOW ANALYSIS

While funds flow anlysis studies the reasons for the changes in working capital by anlysing the souces and application of funds, cash flow analysis paya attentions to changes in cash position that has taken place between two accounting periods. These reasons are not available in the traditional a statement known as a cash flow statement. A cash flow statewment summarises the change in cash position os the concern. Transaction which increase the cash position of the concern are labelled as "inflows" of cash and those which decreases the cash position as " out flows " of cash.