Question

What does the cash flows from investing activities section tell investors and creditors? Why is this section important?

Answer 1

cash flows from investing activities section gives information of the total inflow or outflow occured from a long term assets or investments(other than non-current assets ). Cash outflow will be in capital expenditure and inflow will be in funds from issuing more shareholder equity.

Through investing activity investors can know the company total investments value and how their money is being used and creditors concern will be their claim on total assets of company if their amount is not paid to them.