Difference between funds flow statement and balance sheet

Differences Between Funds Flow Statement and Balance Sheet

The following table presents 14 points of differences between funds flow statement and balance sheet.

Funds flow statement Balance Sheet
1. It shows the working capital changes between two balance sheet datas. 1. It shows the assets and liabilities position of the company on a particular date.
2. It shows the changes in the financial position of the company and dynamic in nature. 2. It is a statement of financial position of the company on a particular date and static in nature.
3. It does not deal with the personal accounts of the business. 3. The balance sheet contains the details of personal account also.
4. It shows the sources and uses of funds in a particular period of time. 4. It discloses the value of assets and liabilities at a particular point of time.
5. The flow of funds over a period of time is known from the funds flow statement. 5. The flow of funds cannot be find ‘ out on seeing balance sheet.
6. It is tool for financial analysis to the top management. 6. Balance sheet cannot be used as a tool for financial analysis to the top management.
7. A schedule of changes in working capital is prepared before preparing funds flow statement. 7. Profit and loss account is prepared before preparing balance sheet.
8. Funds flow statement is prepared whenever a need raised to the top management. 8. Balance sheet is prepared at the end of the accounting period.
9. Funds flow statement is not published. 9. Balance sheet is published.
10. Funds flow statement is used mostly by the top management. 10. Balance sheet is normally used by external parties.
11. Balance sheet is used to prepare funds flow statement. 11. Funds flow statement cannot be used for preparing balance sheet.
12. The information of balance sheet are used for preparing funds flow statement. 12. The information of trial balance are used for preparing balance sheet.
13. It is prepared only after the financial accounts are completed. 13. It is prepared soon after preparing profit and loss account.
14. Funds flow statement is prepared by the Management Accountant. 14. Balance Sheet is prepared by the Chartered Accountant

You may also be interested to read the following article which lists out various Difference between Funds flow Statement & Income Statement

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