The Statement of Sources and Usage of Funds (DOAR) highlights the concept of Net Working Capital at the beginning and at the end of the fiscal year, as well as points out the changes in the company's financial status.
The Net Working Capital is obtained by means of this formula:
where: AC = Short-term Assets
PC = Short-term Liabilities
This statement is based on the Balance Sheet, the Income Statement and the Statement of Accumulated Profits and Losses of the previous and the current period.
In addition to the above-mentioned statements, the following information is required for the accountant to prepare the statement:
- the cost of the items posted in the Permanent Assets.
- the cost of the items acquired in the Permanent Assets.
- Installments corresponding to the Capital and contributions to Capital Reserves.
- Third Party Funds, resulting from the increase of the Long-term Liabilities and others, as stated in the above-mentioned legal text.
