Design And Application Of The Cash Flows Statement In Higher Learning Institutions

Along with the formation and development of socialistic market economy, and continuous deepening and improvement of educational reform and economy reform, institutions of higher education institutions is becoming independent legal entities for society, rather than appurtenant units of government. Different from the planned economy, under which financial allocation is the only revenue source of colleges and universities, the plural capital source of the market economy are as flowing: financial allocation as a main source, self-financing expenditure as accessorial sources and so on. Under the circumstances, it is obviously necessary to improve financial management level and fund operating capacity, which will be both benefit to achieve sustainable development and build a first class university.The statement of cash flow, which plays an irreplaceable role in the analysis of the financial situation of enterprises, is one of the most important financial reports. However, according to the accounting systems of higher education institutions in China, colleges and universities needn't to report the statement of cash flow, thus there are no prescriptions of its format and compiling methods. For above reasons, most universities don't prepare cash flow statement. In other words, there is no statement that provides information about input and output of cash and cash equivalents receipts in higher education institutions during an accounting period.This paper combines theoretical research and case analysis, and gets the conclusion that it is necessary to prepare cash flow statement with the characteristic of the higher education institutions and analysis of related theories. After this, a special cash flow statement for higher education institutions is designed, and then an applied analysis of cash flow statement. At last, it takes university A, which is directly under the ministry of education, as an example. After the compiling of cash flow statement, the cash flow information of university A during an accounting period has been obtained through the analysis of its financial data. In this way, the debt repayment ability and its financial situation can be evaluated objectively. The accounting statement users could get more detailed and exact information about the situation and obtaining ability of cash. And thus they will have an accurate, credible judgment of paying ability in cash, debt repayment ability and the demand of external funds for higher education institutions.