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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  

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