FUNDS FLOW STATEMENT

AFTERSCHO☺OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
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www.afterschoool.tk AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 1
FOR PGPSE PARTICIPANTS
 FUNDS FLOW STATEMENT

Dr. T.K. Jain.

AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk, www.afterschoool.tk

www.afterschoool.tk AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 2
FOR PGPSE PARTICIPANTS
 WHAT IS A FUND?

• FUND MEANS NET WORKING CAPITAL

• CURRENT ASSET IS ALSO CALLED
GROSS WORKING CAPITAL OR FUND
• NET WORKING CAPITAL (CURRENT
ASSET – CURRENT LIABILITIES) IS
ALSO CALLED FUND.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 3

FOR PGPSE PARTICIPANTS
 WHAT IS FUND FLOW ?

• IF FUNDS INCREASE OR DECREASE,

THERE IS FUNDS FLOW.
• IF CURRENT ASSETS INCREASE OR
DECREASE, THERE IS FUNDS FLOW
• IF CURRENT LIABILITIES INCREASE
OR DECREASE, THERE IS FUNDS
FLOW.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 4

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• PURCHASED BUILDING AGAINST
ISSUE OF SHARES
• Answer:
• There is no funds flow as there is no
change in working capital. Fixed assets
(building) have increased along with
increase in long term liabilities (shares) –
thus there is no funds flow.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 5
FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Purchased Raw Material against cash

• Answer :
• No – there is no funds flow – as stock has
increased but cash has decreased equally
– the net impact is nil.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 6

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Purchased Furniture against cash
• Answer:
• Yes, there is funds flow as current assets
have decreased and fixed assets
(furniture) have increased.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 7

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Purchased furniture on 3 month credit.
• Answer :
• Yes – fixed assets have increased, and
current liability has also increased, thus
net working capital has decreased. Thus
there is flow of fund (as current liability has
increased so net working capital (ca-cl)
has decreased).
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 8
FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Redeemed Debentures.
• Answer :
• Yes, we have paid long term liabilities (so
they have reduced), simultaneously, we
have also decreased our current assets
(cash / bank), thus there is funds flow
(change in net working capital).

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 9

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• There is bad debt of Rs. 5000.
• Answer :
• Yes,
• Bad debt results in reduction in current
assets – thus net working capital (funds)
have reduced).

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 10

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Purchased securities (maturing in next 1
year).
• Answer:
• No – as funds have remained unchanged.
Securities (short term) are also current
assets and bank / cash is also current
asset – one has increased and one has
decreased.
www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 11
FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Sold project A against shares of company
XYZ
• Answer:
• No – there is no change in funds – long
term assets have been exchanged against
long term assets.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 12

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• The company buys a car for use by Mr.
Ramesh, the MD of the company.

• answer:
• Yes, fixed assets has increased but
current asset has reduced, thus there is
flow of fund.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 13

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Depreciation of building.
• Answer:
• No – there is no flow of fund

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 14

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Sales of Rs. 10 lakhs out of which 2 lakhs
are profit.
• Answer:
• Rs. 2 lakhs are funds - as it will increase
our working capital.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 15

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• One employee takes loan of Rs. 50000 for
10 months.
• Answer:
• No – there is no change in funds – as
current assets have increased (loans and
advances) and decreased (cash/ bank)
simultaneously.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 16

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Bank overdraft paid
• Answer:
• No change on funds as current liabilities
(bank overdraft) has decreased along with
cash / bank balance - so there is no net
impact.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 17

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Purchased shares of Jitu Forex
International Inc.
• Answer:
• Yes – there is funds flow as fixed assets
are increasing (investment) along with
decrease in current assets.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 18

FOR PGPSE PARTICIPANTS
 IS THERE FUNDS FLOW IN THE
FOLLOWING CASES?
• Provision for Taxation increased
• Answer :
• Treat provision for taxation as current liability,
show the difference in statement of changes in
working capital (no entry is required in funds flow
statement and P& L statement even for payment
of taxes).
• 2nd option: add this year’s provision in P & L A/c
and also show the payments in Funds Flow
statement.

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 19

FOR PGPSE PARTICIPANTS
 About AFTERSCHO☺OL

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 20
FOR PGPSE PARTICIPANTS
 Branches of AFTERSCHO☺OL

• PGPSE programme is open all over the

world as free online programme.
• Those who complete PSPSE have the
freedom to start branches of
AFTERSCHO☺OL
• A few branches have already started -
one such branch is at KOTA (Rajasthan).

www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 21

FOR PGPSE PARTICIPANTS
 Workshop on social entrepreneurship

• We conduct workshop on social

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workshop on social entrepreeurship.
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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 22

FOR PGPSE PARTICIPANTS
 FREE ONLINE PROGRAMME

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 23

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 24

FOR PGPSE PARTICIPANTS
 Pursue professional courses along with
PGPSE

• AFTERSCHO☺OL permits you to pursue

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www.afterschoool.tk AFTERSCHO☺OL's MATERIAL 25

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