Question

How to and an example: 1. Identify components of investing and financing activities reflected on the statement of cash flow

Answer 1

Cash flow from investing activities is an item on the cash flow statement that reports changes resulting from amounts spent on investments in capital assets such as plant and equipment, investments.

Example of Cash flow from Investing activities

Sale of invt

Purchase of PPE

Sale of PPE

A category in a company’s cash flow statement that accounts for external activities that allow a firm to raise capital and repay investors, such as issuing cash dividends, adding or changing loans or issuing more stock.

Example of Cash flow from Financing activities

Issue of Stock

Issue of additional Paid in capital

Dividends Paid