Question

A company reported a negative net cash flows from investing activities. What could be the reasons...

A company reported a negative net cash flows from investing activities. What could be the reasons behind this negative number? Explain your answer clearly. (Word limit 150 words +/-10%)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Cashflow from Investing activities comprises of cash generated or spend on various investment related activities like purchases of assets and financial securities or sale of assets and financial securities. Negative cashflow from investing activities might be due to the heavy expenses towards research and development, increase in capital expenditure, investment in long term securities for capital appreciation, investment in marketable securities for earning better returns compared with risk free rates. Also, negative cash flow from investing activities might also be due to no or lesser proceeds from marketable securities or no or lesser proceeds from sale of assets, etc.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Determining Net Cash Flow from Investing Activities Davis Inc. reported the following information: 12/31/2019 12/31/2018 Equipment...
Determining Net Cash Flow from Investing Activities Davis Inc. reported the following information: 12/31/2019 12/31/2018 Equipment $160,000 $115,000 Accumulated depreciation (85,000) (59,000) Investment (long-term) 18,610 10,000 In addition, Davis sold equipment costing $12,500 with accumulated depreciation of $8,950 for $2,330 cash, producing a $1,220 loss. Davis reported net income for 2019 of $122,350. Required: Compute net cash flow from investing activities. Use a minus sign to indicate negative cash flows (outflows).
Cash Flows from (Used for) Operating Activities The net income reported on the income statement for...
Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $23,500 $18,700 Accounts receivable (net) 56,000 48,000 Merchandise inventory 35,500 40,000 Prepaid expenses 4,750 7,000 Accounts payable (merchandise creditors) 21,800 16,800...
Elkin Company reported the following in its Statement of cash Flows for 2014: Cash Flows from...
Elkin Company reported the following in its Statement of cash Flows for 2014: Cash Flows from operations   ($35,000) Cash Flows from investing activities   ($20,000) Cash Flows from financing activities   +$115,000 Net increase in cash   +$60,000 Which of the following is a possible description of the company’s results? Group of answer choices The company issued bonds to generate funds for its operations and investments in stock The company sold Investments in stock and Treasury Stock to fund its operations The company...
Scenario Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities...
Scenario Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities 1. + + + 2. + + - 3. + - + 4. + - - 5. - + + 6. - + - 7. - - + 8. - - - Based on the chart above which company profile will be fit the cash flow pattern for scenario 2? A Successful, but actively relocating using financing from operations with cash from creditors and...
Cash Flows from Investing and Financing Activities Determine the amount of cash received and paid for...
Cash Flows from Investing and Financing Activities Determine the amount of cash received and paid for financing and investing activities and the cash flows as they would appear on Rogerson’s statement of cash flows for the year ended December 31, 20-2. Use a minus to indicate any decreases in cash or cash outflows. Rogerson Company’s comparative balance sheet as of December 31, 20-2 and 20-1, showed the following with regard to investing and financing activities: 20-2 20-1 Building $130,100    $0   ...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $144,400. Depreciation recorded on store equipment for the year amounted to $23,800. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of YearBeginning of Year Cash$58,770 $54,070 Accounts receivable (net)42,140 39,960 Inventories57,540 60,830 Prepaid expenses6,460 5,140 Accounts payable (merchandise creditors)55,070 51,150 Wages payable30,090 33,420 a. Prepare the “Cash flows...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $202,100. Depreciation recorded on equipment and a building amounted to $60,400 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,330 $54,410 Accounts receivable (net) 65,090 67,140 Inventories 128,330 115,680 Prepaid expenses 7,130 7,670 Accounts payable (merchandise creditors) 57,340 60,720...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $146,100. Depreciation recorded on store equipment for the year amounted to $24,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $58,590 $53,320 Accounts receivable (net) 42,010 39,400 Merchandise inventory 57,360 59,990 Prepaid expenses 6,440 5,070 Accounts payable (merchandise creditors) 54,900 50,440 Wages...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $135,100. Depreciation recorded on store equipment for the year amounted to $22,300. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $53,630 $49,340 Accounts receivable (net) 38,450 36,460 Merchandise inventory 52,500 55,510 Prepaid expenses 5,900 4,690 Accounts payable (merchandise creditors) 50,250 46,680 Wages...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $117,600. Depreciation recorded on store equipment for the year amounted to $19,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $45,630 $41,520 Accounts receivable (net) 32,720 30,680 Merchandise inventory 44,670 46,710 Prepaid expenses 5,020 3,940 Accounts payable (merchandise creditors) 42,760 39,280 Wages...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT