Funds Type Statements
Self-Paced Overview
Analyzing Information
Analyzing the Information
When analyzing the information that goes into a funds statement, each item should be analyzed in detail and the overall impact of any change should be examined.
In the funds statement example below, the company appears to be profitable because retained earnings increased. Also, the company paid off a great deal of debt and purchased some fixed assets. To finance these moves, the company relied on reductions in inventory, receivables, and cash, as well as plowed earnings back into the firm.
Funds Statement - Step 2
| Sources and Uses of Funds | ||||
| Ending | Beginning | Source | Use | |
|---|---|---|---|---|
| Cash | $5,000 | $20,000 | $15,000 | |
| Marketable Securities | $10,000 | $10,000 | ||
| Receivables | $5,145 | $50,000 | $44,855 | |
| Inventories | $32,250 | $70,000 | $37,750 | |
| Fixed Assets | $172,000 | $160,000 | $12,000 | |
| Accounts Payable | $10,000 | $10,000 | ||
| Accruals | $4,000 | $4,000 | ||
| Notes Payable | $0 | $24,000 | $24,000 | |
| Long-Term Debt | $2,720 | $96,000 | $93,280 | |
| Common Stock | $64,000 | $64,000 | ||
| Retained Earnings | $143,675 | $112,000 | $31,675 | |