Concept of Flow of Funds: It refers to the 'Change in Funds' or 'Change in Working Capital'. That is, any increase or decrease in Working Capital. In business, daily, numerous transactions get place. a few of these transactions increase the Funds while others might be decrease the Funds and a few may not make any transform in the Funds position. If a deal results in increase of Funds, it will be defined as a 'Source of Funds'. In case a transaction results in decrease of Funds, it will be taken as an application or use of Funds. In case a transaction does not make any change in the funds position that existed just before the occurrence of the transaction, it is supposed that it is a non-Fund transaction.