What is source statement?

The statement of sources and uses of funds tells us exactly where a company has generated its money from and how it was spent or put to use. The cash inflows into the company or the cash received, and the cash outflows from the company, or the cash spent, are shown in this statement.

What are uses of sources?

A sources and uses analysis provides a summary of where the capital used to fund an acquisition will come from (the sources), what this capital will purchase (the uses). The sources and the uses must equal each other, and they must total the total purchase price plus transaction costs.

Do Sources and Uses have to balance?

When computing their total amounts, the sources and uses accounts should equal each other. The sources and uses schedule becomes very important and useful when creating a model for situations such as Recapitalization, Restructuring, and Mergers & Acquisitions. Therefore, it is commonly used in investment banking.

What is source and use in cash flow statement?

Definition. The sources and uses of cash statement, also called the cash flows statement, discloses the details about the cash outflows and inflows of a business over a specific time period.

What is sources and uses?

Sources and Uses. Definition – What does Sources and Uses mean? A sources and uses analysis provides a summary of where the capital used to fund an acquisition will come from (the sources), what this capital will purchase (the uses). The sources and the uses must equal each other, and they must total the total purchase price plus transaction costs.

What is the source of the statement?

The statement of sources and uses of funds is a statement that condenses the financial statements and financial plan in one statement. It displays the sources from which an organization or a company manages to generate cash and all the areas where the obtained cash is used during an accounting period. This statement also shows a business’s cash inflow and outflow over an accounting period, usually a year or a month.

What are the sources and uses of cash?

Operating cash sources include customer remittances, investment gains, vendor rebates and occasional refunds a business receives from the Internal Revenue Service and states’ fiscal authorities. Cash uses pertain to money the organization doles out for things like salaries, merchandise, utilities and interest.

What are the sources and application of funds?

The Source and Application of Funds Statement tells exactly where the company got their money from and how it was spent. It tells whether management has made sound investment decisions. This statement is made up by listing the changes that have occurred in all of the Balance Sheet Items between any two Balance Sheet dates.