What is the difference between cash flow and Fund flow?

Answer:

In financial accounting, cash flow refers to the report on the cash flow reports in accordance with generally accepted accounting principles (GAAP). This statement shows the inflows and outflows of real money (cash or assets) from operating, investing or financing activities. “Flow of Fund” has two different meanings, one for accounting purposes and for investment purposes. Medoroga, it can be used with reference to the statement of cash flow, which GAAP requires from 1971 until 1987. Investment-wise, it belongs to the investors and analysts to track the flow of funds in different sectors or types of assets, – the net flow of a bond Fund during a particular month, for example on the market.

Cash Flow

The company receives cash inflow revenue from sale of goods, rendering of services sale of assets, earning interest on investments, leases, loans or issue of new shares. Cash outflow as a result of purchases, repayment of loans, expansion of operations, salary payment or dividend payments.

As the Commission on securities and exchange Commission (sec) requires all listed companies to use accrual accounting – which largely ignores the actual balance of funds in cash – investors and creditors rely on the statement of cash flows to assess the company’s liquidity and cash flow management. This is a more reliable tool than the indicators companies use to dress up your earnings such as income before interest, taxes, depreciation and amortization (EBITDA).

The Flow Of Fund

When required, report on movement of funds is often used by accountants to report any changes in net working capital of the company for a certain period of time. Most of this information is now captured in the statement of cash flows.

Investing using the flow Fund is now more useful. Here, in General, investor sentiment can be judged, as it applies to different asset classes. If the inflow of funds into the stock market is positive for instance, it assumes that investors, in General, optimistic view on the economy (or at least in the short term, the profitability of listed companies).

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