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statement of sources and application of funds

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(Querist)
24 March 2017 why is increase in working capital considered as application of funds?
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Pavni Dasari

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Pavni Dasari (Querist)
25 March 2017 can someone please solve my query?
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
24 October 2021 An increase in net capital balance during account period denotes the deployment of more funds by the amount of the increase, hence it is considered a use of funds.
On the other hand, a decrease in net working capital balance denotes the availability of funds with the business; hence it is a source of funds.
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