Question

If you want to know if the company is buying or selling fixed assets, which area would you look if you are looking for the cash flow

Answer 1

Answer)

Fixed Assets Include, Land & Building, Plant and Equipment. Investment is these assets is made for production of goods and services. These assets are generally held for a period of more than one year and thus are classified as Long term assets.

Buying and selling of fixed assets is categorized under ‘CASH FLOW FROM INVESTING ACTIVTIIES” section of Cash Flow Statement.

· Buying of fixed assets will be result in outflow of cash and thus will be shown as negative figure under Cash flow from Investing Activity.

· Selling of fixed assets will be result in Inflow of cash and thus will be shown as positive figure under Cash flow from Investing Activity.