Disadvantages of Fund Flow Statements

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 shivanshi singh asked about 3 years ago

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Open uri20170510 32134 1c996lj?1494421732 Anil answered almost 3 years ago

Funds flow statement has many advantages; however it has some disadvantages or limitations also. Let’s look at some of the limitations of funds flow statement – 1.Funds flow statement has to be used along with balance sheet and profit and loss account, it cannot be used alone. 2.It does not reveal the cash position of the company, and that is why company has to prepare cash flow statement in addition to funds flow statement. 3.Funds flow statement merely rearranges the data which is there in the books of account and therefore it lacks originality. In simple words it presents the data in the financial statements in systematic way and therefore many companies tend to avoid preparing funds flow statements

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