Funds Flow and Cashflow Analysis-1

8/7/2019 Funds Flow and Cashflow Analysis-1

1/16

Presentation topic: fund flow and cash flow

statement

Presented by:Satya prakash


2/16

IntroductionIntroduction

FundsFunds FlowFlow StatementStatement oror StatementStatement ofof

ChangesChanges inin FinancialFinancial PositionPosition oror aa

StatementStatement ofof SourcesSources andand UsesUses ofof FundFundshowsshows forfor aa particularparticular periodperiod ofof timetime thethe

sourcessources fromfrom whichwhich fundsfunds werewere obtainedobtained

byby anan MFIMFI andand thethe specificspecific usesuses toto whichwhich

suchsuch fundsfunds werewere appliedapplied..


3/16

IntroductionIntroduction--Contd.Contd.

It reports: the movement of funds betweenIt reports: the movement of funds between

various assets and liabilities during anvarious assets and liabilities during an

accounting period.accounting period. The following information are required toThe following information are required to

prepare a Funds Flow Statement:prepare a Funds Flow Statement:

Balance Sheets of the Current Year andBalance Sheets of the Current Year and

preceding Accounting Year,preceding Accounting Year,


4/16

Required InformationRequired Information--Contd.Contd.

Profit and Loss Account of the currentProfit and Loss Account of the current

Accounting Year andAccounting Year and

Related Notes on Accounts, SchedulesRelated Notes on Accounts, Schedulesand Appendices.and Appendices.


5/16

ObjectivesObjectives

To show the sources of financial resourcesTo show the sources of financial resources

To show the uses of financial resources,To show the uses of financial resources,

To provide information on all financing andTo provide information on all financing andinvestment activities of an MFI,investment activities of an MFI,


6/16

ObjectivesObjectives--Contd.Contd.

To show whether the financial resourcesTo show whether the financial resources

are properly applied or used by an MFI.are properly applied or used by an MFI.

To disclose the amount and causes ofTo disclose the amount and causes ofchange in financial position.change in financial position.


7/16

Balance SheetBalance Sheet

TheThe balancebalance sheetsheet providesprovides aa listinglisting ofof allall

thethe assets,assets, liabilitiesliabilities andand capitalcapital ofof anan MFIMFI

atat aa givengiven pointpoint inin timetime..

AsAs such,such, itit isis aa snapshotsnapshot ofof thethe sourcessources

ofof fundsfunds (liabilities(liabilities andand capital)capital) andand howhow

thesethese fundsfunds havehave beenbeen appliedapplied (as(as

assets)assets)..


8/16

This can be illustrated as belowThis can be illustrated as below

The design of the balance sheet is basedThe design of the balance sheet is based

on the accounting equation that states:on the accounting equation that states:

Liabilities and capital = AssetsLiabilities and capital = Assets

Liabilities &CapitalLiabilities &Capital AssetsAssets

SHARES

SURPLUSDEPOSITS

SAVINGS

CASH

LOANSINVESTMENTS

FIXED ASSETS


9/16

Liabilities & CapitalLiabilities & Capital

TheThe LiabilityLiability andand capitalcapital sideside ofof thethe

balancebalance sheetsheet usuallyusually comprisescomprises threethree

categoriescategories ofof itemsitems::

Member capital (or equity ):Member capital (or equity ):

Long term Liabilities:Long term Liabilities:

Current Liabilities:Current Liabilities:


10/16

AssetsAssets

TheThe LiabilityLiability andand capitalcapital sideside ofof thethebalancebalance sheetsheet usuallyusually comprisescomprises threethreecategoriescategories ofof itemsitems::

Cash:Cash:

Investments:Investments:

Loans:Loans:

Fixed Assets:Fixed Assets:


11/16

Cash Flow SummaryCash Flow Summary

ThisThis statementstatement isis aa simplesimple summarysummary ofof cashcash inflowsinflows andand

outflowsoutflows overover aa givengiven periodperiod ofof timetime..

CashCash flowflow isis preparedprepared onon aa monthlymonthly basisbasis inin savingssavings andand

creditcredit cooperativescooperatives..

CashCash inflowinflow consistsconsists ofof savings,savings, deposits,deposits, shares,shares, loanloan

repayments,repayments, serviceservice fees,fees, interestinterest received,received, finesfines etcetc..


12/16

Contd

CashCash outflowoutflow consistsconsists ofof sharesshares

withdrawn,withdrawn, savingssavings withdrawn,withdrawn, depositsdeposits

withdrawn,withdrawn, loansloans issued,issued, equipmentequipment

purchased,purchased, expensesexpenses paidpaid etcetc..

CashCash flowflow isis thethe differencedifference betweenbetween thethe

cashcash flowingflowing inin andand thethe cashcash flowingflowing outout ofof

thethe CooperativeCooperative..


13/16

The Income and Expenditure StatementThe Income and Expenditure Statement

TheThe incomeincome andand expenditureexpenditure statementstatement isisaa summarysummary ofof thethe incomeincome andand expensesexpenses ofofthethe cooperativecooperative forfor aa periodperiod ofof timetime..

ThisThis isis alsoalso calledcalled asas profitprofit andand losslossstatementstatement.. UsuallyUsually thisthis isis preparedprepared

monthlymonthly oror annuallyannually.. TheThe accountingaccountingequationequation cancan bebe expandedexpanded toto includeinclude thethecomponentscomponents ofof incomeincome andand expensesexpenses..


14/16

ContdContd

The accounting equation can be expanded toThe accounting equation can be expanded to

include the components of income andinclude the components of income and

expenses.expenses.

Assets = Liabilities + Capital + IncomeAssets = Liabilities + Capital + Income ExpensesExpenses

TheThe incomeincome andand expensesexpenses statementstatement listslists allall thethe

expensesexpenses incurredincurred byby thethe cooperativecooperative duringduring thethe givengiven

periodperiod ofof timetime andand allall thethe incomeincome earnedearned.. TheThe statementstatementalsoalso showsshows thethe excessexcess ofof incomeincome overover expenditureexpenditure whichwhich

isis calledcalled asas surplussurplus oror profitprofit..


15/16

The income and expenditure can beThe income and expenditure can be

grouped under the following heads:grouped under the following heads:

Income:Income: Expenses:Expenses:

--InterestInterest onon LoansLoans --CostCost ofof fundsfunds

--serviceservice feefee --personnelpersonnel costscosts

--membershipmembership feesfees --facilityfacility costscosts

--interestinterest onon investmentsinvestments --operationaloperational costscosts

--OtherOther incomeincome --governinggoverning costscosts


16/16

Documents

Funds Flow and Cashflow Analysis-1