AbstractA flow‐of‐funds approach to the business management problems of the family‐operated farm is presented. Recorded and projected flow‐of‐funds statements, in connection with the conventional profit‐and‐loss and balance‐sheet statements, are appropriate tools to aid in financial management and financial control. The probable financial consequences of management decisions, suggested by conventional budgets, can be projected and evaluated, especially the effect of the decisions on the cash‐flow position of the farm‐family complex. The flow‐of‐funds statement is illustrated and suggestions are made for its possible applications.