The Funds Flow Statement (also known as the Statement of Changes in Financial Position) is a financial statement that provides information about the sources and uses of funds by a business over a specific period. It helps in analyzing the movement of funds within the company and provides insights into its financial activities, such as investments, financing, and operating activities. Here’s an overview of the meaning and concept of gross in the context of a Funds Flow Statement:
- Meaning of Funds Flow Statement:
- The Funds Flow Statement presents a summary of changes in a company’s financial position between two balance sheet dates.
- It classifies cash flows into two main categories: sources of funds and uses of funds.
- Sources of funds represent increases in the company’s financial resources, such as proceeds from issuing stock, borrowing funds, or generating profits.
- Uses of funds represent decreases in the company’s financial resources, such as investments in fixed assets, repayment of debt, or payment of dividends.
- Concept of Gross:
- In the context of a Funds Flow Statement, the term “gross” is often used to refer to the total amount of funds involved in a particular transaction or activity, without considering any deductions or adjustments.
- For example, when analyzing sources of funds, the gross amount represents the total inflow of funds from various sources, such as cash sales, proceeds from the sale of assets, or additional borrowings, before considering any reductions or adjustments.
- Similarly, when analyzing uses of funds, the gross amount represents the total outflow of funds for various purposes, such as investments in new equipment, repayment of debt, or payment of dividends, before considering any deductions or adjustments.
- The concept of gross helps in understanding the magnitude and scale of financial activities without focusing on specific details or components. It provides a broad overview of the movement of funds within the company and highlights significant trends or changes in financial position over time.
 the Funds Flow Statement is a valuable tool for analyzing the sources and uses of funds by a company, providing insights into its financial activities and changes in financial position. The concept of gross in the Funds Flow Statement helps in understanding the total amount of funds involved in various transactions or activities, without considering any deductions or adjustments, thus providing a broad overview of the company’s financial activities.