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Identify and describe the three areas of activities in the cash flow statement that capture inflows...

Identify and describe the three areas of activities in the cash flow statement that capture inflows and outflows of cash.

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Answer #1

the three areas of activities in the cash flow statement that capture inflows and outflows of cash are: -

Operating

In this category the cash flows relating to the operating activity are classified. The operating activity are those which are main operations of the company. This category shows the cash flow from operations of the business.

Investing

This shows the net cash flows from investing activity. The examples includes :

Purchase/Sale of machinery

Investment in subsidiary

Financing

This shows the net cash flows from financing activities such as : -

Issue of common stock

Repayment of loan

Payment of interest.

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