Statement of changes in Working Capital

This statement follows the statement of Sources and Application of Funds. The primary purpose of the statement is to explain the net change in Working Capital, as arrived in the Funds Flow Statement. In this statement, all current Assets and Current Liabilities are individually listed. Against each account, the figure pertaining to that account at the beginning and at the end of accounting period shown. The net change in its position also shown. The changes taking place with respect to each account should and up to equal the net change in working capital, as shown by the Funds Flow statement.

While entering the effect of change in a current account on working capital, the following rules must be followed.

1. An increase in Current Assets means an increase in Working Capital;
2. An decrease in Current Assets means an decrease in Working Capital;
3. An increase in Current Liabilities means an decrease in Working Capital;
4. An decrease in Current Liabilities means an increase in Working Capital;

Statement of Changes in Working Capital of Mr. XYZ Ltd.,