What account for the sentences: "Account balanced, Pocket empty?" If accounting profits have lost its role in directing the management`s perceptives, then what kind of focal index of management effectives are needed for the firm to survive today`s slack business? By recent business depression, an increasing number of firms are said to be on the verge of bankruptcy. Korean Chamber of Commerce and Industry had once analyzed several resons for these business failures, and indicated that the most serious causes were lack of efficient management of funds, and that financial structure of firms were known to become form bad to worse. All of these situations reflect the ever greater need for fund-flow analysis to guide managemnet in deploying its liquid assets resources most effectly, and to derive an index of management opportunities to shift a firm`s capital into areas offering the most attractive rate of return. Our concern in fund-flow analysis also reflects today`s business environment characterized by rapid technological change and growth. Yet most of our firms do not use fund-flow statement. and that there has been no empirical study that can be utilized in every firm. By dise cussing the major characteristics of fund-flow statement, this study aims at recommending businessmen to make out fund-flow statment for its wide spread use. Fund-flow analysis can be approached either from the point of view of accounting or from the perspective of financial management. Most of my discussion have been centred around the latter approach but a little comments have also been taken on the profit-loss oriented accounting under accrual basis. This article consists of five chapters. The first chapter descrives the need for fund-flow analysis, and its historical and social background. The second chapter deals with the fund-accounting and fund-flow statement. I have introduced several view point; on these subject like those of ASOBAT (A Statement of Basic Accounting Theory issued by American Accounting Association), A report on the 1966-68 Committee on External Reporting Issued by A.A.A., Accounting Principles Board opinion No. 3 issued by A. I. C. P. A. and those of Perry Mason at his book, "Cash Flow Analysis" and the Fund Statement. I have also commented on the opinion of William J. Vatter, E. Walb (Finanzwirtshaftlich Bilanz) and H. Ruchti(Bewegungsbilanz). Perry Mason`s opinion on the purpose of drawing up fund flow statement was also discussed. The third chapter descriced the concepts of fund and fund-flow statement. There are several concepts on the fund like literal cash, and cash and marketable securities. net monetary assets, working capitals and all financial resources. But the concept of fund needs to be defined and measured in relation to the purpose for which the resulting data are intended. For example if the purpose is to measure funds available for capital expenditures, then the relevant concept would be net working capital. I have also introduced the opinion of A.A.A. (Statement of Resources and Commitments, and Statement of Current Monetary Flows). There was presented several models of fund flow statement that: can serve to its purpose. I have described two kinds of method in making out fund-flow statement, that of drawing up the statement Pram financial statements and from the T account. The fourth chapter deals with the application of fund-flow analysis to the H-company Ltd., which presention of the empirical study done in America and Japan was compared. Most of the leading company in America, and Japan now use fund flow statement to get reliable information about the fund phase of capital turn-over cycle(cash-materials-equipment-plants-inventory-goods-receivables-cash). These information is widely used to guide financial planning and the administration of various kinds of assets. These data are also useful to forecast the movement of funds, and to evaluate the firm`s liquidity and purching power. Therefore fund flo