Difference between cash flow and fund flow

By Annapoorna


Updated on: Feb 8th, 2022


3 min read

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The cash flow vs fund flow statements of a corporation are two separate indicators that measure funds over time. The cash flow statement will track a company’s real cash inflows and outflows (cash and cash equivalents). The fund flow statement shows how much money is coming in and going out of the firm. Both help provide investors and the market with a periodic picture of the company’s performance.

Cash flow – explained

The increase or decrease in the quantity of money a firm, organisation, or individual has is referred to as Cash Flow (CF). Cash flows indicate the quantity of cash (money) created or consumed over a specific period. There are several different forms of CF, each with its own set of vital applications in business and financial research.

One of the essential purposes of financial reporting is to assess the quantities, timing, and uncertainty of cash flows and where they originate and where they go. Cash flow is crucial for analysing a company’s liquidity, flexibility, and overall financial success.

Fund flow – explained

The net of all cash inflows and outflows into and out of various financial assets is known as fund flow. Fund flow is often measured on a monthly or quarterly basis. Share outflows and share purchases or inflows are considered, not the performance of an asset or fund.

A fund flow is solely concerned with cash movement, indicating the net movement after assessing monetary fund inflows and outflows. Payments to investors or payments are given to the firm in return for goods and services are examples of these transactions.

Major differences between fund flow and cash flow

Cash Flow StatementFund Flow Statement
A cash flow statement shows how much money is coming in and going out of a company based on recorded data.A fund flow statement represents the analytical information connected to a fund's numerous sources and their use in an accounting cycle.
The change in the position of cash in the firm is dealt with in the cash flow statement.The change in working capital position between two balance sheet dates is dealt with in the fund flow statement.
The cash basis of accounting is used in the cash flow statement.The fund flow statement employs the accrual basis of accounting.
A cash flow statement is created for short-term financial planning and decision makingA fund flow statement is appropriate for long-term financial planning and decision making.

Both cash flow vs fund flow aid in providing investors and the market with a periodic picture of the company’s performance. The cash flow statement is ideal for determining a company’s liquidity profile, whereas the fund flow statement is best for long-term financial planning.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more


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