Common Size Analysis And Funds Flow Statement

Common Size Analysis:

Another important financial statement analysis techniques are common size analysis in
which figures reported are converted into percentage to some common base. In the balance
sheet the total assets figures is assumed to be 100 and all figures are expressed as a percentage
of this total. It is one of the simplest methods of financial statement analysis, which reflects
the relationship of each and every item with the base value of 100%.

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FUNDS FLOW STATEMENT:

Funds flow statement is one of the important tools, which is used in many ways. It helps to
understand the changes in the financial position of a business enterprise between the
beginning and ending financial statement dates. It is also called as statement of sources and
uses of funds.

Institute of Cost and Works Accounts of India, funds flow statement is defined as “a
statement prospective or retrospective, setting out the sources and application of the funds
of an enterprise. The purpose of the statement is to indicate clearly the requirement of
funds and how they are proposed to be raised and the efficient utilization and application
of the same”.