Funds flow :financial management ipcc gp1

Sources of Fund-Any transcation which increases the amount of working capital is a source of working capital .The working capital increases if a transcation increases current assets or decreases current liabilities.Example-Issues of shares for cash.

Application of funds-Any transcation which decreases the amount of working capital is an application of working capital .The working capital decreases if a transcation decreases current assets or increases current liabilities.Example-Redemption of Preference share  for cash.