These sources of funds are resources increased from outside the organization to augment funds availability for any of the utilizations to be discussed later. Generally, there are only two manners of doing this:
1. Through contributing or raising additional capital, and
2. Through increased long-term borrowing.
Please notice that short-term creditors are not involved as a source of funds as we have previously defined funds as "current assets less current liabilities". Hence, working capital shows long-term investment in current assets and therefore short-term borrowing will not raise working capital.
The sources of funds, as generally presented in the fund flow statement, are enumerated as given:
Sources of Funds
Net Profit after taxes
Funds provided by operations
New issue of share capital
New issue of debentures/bonds
Additional long-term borrowing
Sale proceeds of fixed assets
Sale of long-term investment