top button
Flag Notify
    Connect to us
      Facebook Login
      Site Registration

Facebook Login
Site Registration

What are the disadvantages of Fund Flow Statements?

+1 vote
What are the disadvantages of Fund Flow Statements?
posted Jun 16, 2017 by Durga Prasad

Share this question
Facebook Share Button Twitter Share Button LinkedIn Share Button

1 Answer

0 votes

Disadvantages of Fund Flow Statements
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 for inference of financial strengths and weakness of a company it cannot be used alone.

  2. Fund Flow Statement 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 only 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.

  4. Funds flow statement is basically historic in nature, that is it indicates what happened in the past and it does not communicate anything about the future, only estimates can be made based on the past data and therefore it

answer Jun 17, 2017 by Naveen Kumar
Contact Us
+91 9880187415
#280, 3rd floor, 5th Main
6th Sector, HSR Layout
Karnataka INDIA.