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Cash Flow Statement vs. Fund Flow Statement: What's the Difference?

Edited by Aimie Carlson || By Harlon Moss || Updated on October 25, 2023
The cash flow statement tracks cash inflows and outflows, while the fund flow statement analyzes changes in working capital.

Key Differences

The cash flow statement is a financial report that showcases how cash enters and exits a business during a specific period. In contrast, the fund flow statement highlights the movement of funds, capturing sources and uses of working capital.
While the cash flow statement primarily categorizes cash activities into operations, investing, and financing, the fund flow statement focuses on broader fund sources and applications, including both cash and non-cash items.
For businesses, understanding the cash flow statement is crucial to ensure liquidity, as it reveals the immediate cash position. On the other hand, the fund flow statement provides insights into the changes in financial position, helping to make informed long-term decisions.
A significant distinction is that the cash flow statement offers a detailed view of cash activities, pinpointing where cash comes from and how it's used. The fund flow statement, conversely, offers a comprehensive look at the movement of working capital, considering all financial resources.
In terms of importance, while both statements are vital, the cash flow statement has become more prevalent in modern financial reporting due to its specificity in tracking cash. However, the fund flow statement remains valuable for businesses aiming to understand comprehensive financial shifts.

Comparison Chart


Tracks cash inflows and outflows
Analyzes changes in working capital


Operations, Investing, Financing
Sources and Applications of Funds


Limited to cash activities
Includes both cash and non-cash items


High in modern financial reporting
Less prevalent but still valuable


Immediate liquidity
Overall changes in financial position

Cash Flow Statement and Fund Flow Statement Definitions

Cash Flow Statement

The cash flow statement is a financial report detailing cash transactions.
The company's cash flow statement showed positive operational inflows.

Fund Flow Statement

The fund flow statement analyzes the changes in financial position.
The fund flow statement showed a large inflow from long-term borrowings.

Cash Flow Statement

It is a mandatory part of financial statements under many accounting standards.
Public companies must regularly publish their cash flow statement to ensure transparency.

Fund Flow Statement

The statement covers both cash and non-cash items.
Unlike the cash flow statement, the fund flow statement considered depreciation.

Cash Flow Statement

Cash flow statements classify cash activities into operations, investing, and financing.
Their cash flow statement indicated high expenditures in the investing section.

Fund Flow Statement

It provides insights into long-term financial planning.
Management used the fund flow statement to strategize their capital allocation.

Cash Flow Statement

The cash flow statement tracks cash sources and uses during a set period.
The quarterly cash flow statement revealed a surge in financing activities.

Fund Flow Statement

The fund flow statement is not mandatory under all accounting standards but is still insightful.
Even though not always required, many firms prepare a fund flow statement for comprehensive financial analysis.

Cash Flow Statement

It reflects a company's liquidity position.
Analysts often scrutinize the cash flow statement to gauge a firm's short-term financial health.

Fund Flow Statement

It details sources and applications of working capital.
Their fund flow statement highlighted an increase in retained earnings.


What does a fund flow statement primarily analyze?

The fund flow statement analyzes the changes in working capital and financial position.

Are non-cash items included in the cash flow statement?

No, the cash flow statement focuses only on cash transactions.

What's the main purpose of a cash flow statement?

The cash flow statement tracks cash inflows and outflows from various business activities.

How are activities classified in the cash flow statement?

They are classified into operations, investing, and financing.

Does the fund flow statement highlight short-term or long-term financial planning?

It is more useful for long-term financial planning and understanding.

Can these statements be used for forecasting?

Absolutely, both can be valuable tools in financial forecasting and planning.

Do both statements use the accrual accounting method?

The cash flow statement doesn't, but the fund flow statement can include accrual-based items.

Which statement provides a broader view of financial changes?

The fund flow statement gives a broader perspective on overall financial shifts.

Can one determine a company's profitability from the cash flow statement?

Not directly; the cash flow statement focuses on liquidity, not profitability.

Is depreciation found on the cash flow statement?

Depreciation itself isn't a cash item, but it's added back in the operations section.

Is the cash flow statement mandatory for all companies?

In many jurisdictions, public companies are required to prepare a cash flow statement.

Is the fund flow statement required under all accounting standards?

No, the fund flow statement isn't mandatory under all standards but remains valuable for analysis.

How often are these statements typically prepared?

Both statements are usually prepared on a quarterly and annual basis.

How does the cash flow statement treat loans obtained?

It treats them as a cash inflow in the financing section.

How does the fund flow statement view a decrease in liabilities?

It views it as an application or use of funds.

Can a company with positive net income have negative cash flow?

Yes, due to non-cash expenses and working capital changes.

Which statement would an investor check for dividend payment?

An investor would check the financing section of the cash flow statement for dividend payments.

Does the fund flow statement cover non-cash activities?

Yes, the fund flow statement covers both cash and non-cash items.

Which statement is more about immediate liquidity?

The cash flow statement provides insights into a company's immediate liquidity.

What are the main components of a fund flow statement?

The main components are sources and applications of funds or working capital.
About Author
Written by
Harlon Moss
Harlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
Edited by
Aimie Carlson
Aimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.

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