Abstract The article presents examination by the author on one aspect of the conventional accounting funds statement and the schedule of working capital, with particular regard to their value for analysts other than accountants. The central idea which the author has tried to develop is that a certain type of transaction which traditionally has been interpreted by accountants as simultaneously increasing and decreasing the total "funds" by equal amounts may properly appear in both the sources and the applied sections of the funds statement. The proposals for improving the statement do not include this principle and on the whole, it appears that the long-established forms of Exhibit. It must still be regarded as the standard practice. There does not seem to be any inevitable reason why the type of transaction in question must be interpreted in the traditional manner. A more imaginative approach would enhance the capacity of this statement to reveal significant information in a comprehensible form.
William M. Parker (Tue,) studied this question.