An example of cash flow from investing activity is : (2024)

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An example of cash flow from investing activity is :? ›

Cash inflows (proceeds) from investing activities include:

Cash flow from investing activities includes any inflows or outflows of cash from a company's long-term investments. The cash flow statement reports the amount of cash and cash equivalents leaving and entering a company. The sections of the cash flow statement are: Cash from operating activities.

The activities included in cash flow from investing actives are capital expenditures, lending money, and the sale of investment securities. Along with this, expenditures in property, plant, and equipment fall within this category as they are a long-term investment.

Example of cash flow from financing activity is payment of dividend.

The receipt of loan repayments is an investing activity on the statement of cash flows.

Investing activities include purchases of long-term assets (such as property, plant, and equipment), acquisitions of other businesses, and investments in marketable securities (stocks and bonds).

Investing activities – cash outflow relating to investment activities covers those expenses related to non-current assets, as listed on the balance sheet. Examples include costs for the purchase of assets or loans to other parties.

To calculate cash flow from investing activities, add the purchases or sales of property and equipment, other businesses, and marketable securities. These items are all listed in a cash-flow statement, but can also be identified by comparing non-current assets on the balance sheet over two periods.

Examples of operating cash flows include sales of goods and services, salary payments, rent payments, and income tax payments.

Examples of common cash flow items stemming from a firm's financing activities are: Receiving cash from issuing stock or spending cash to repurchase shares. Receiving cash from issuing debt or paying down debt. Paying cash dividends to shareholders.

Which transaction is an example of an investing activity for purposes of a statement of cash flow? ›

Investing activities include any sources and uses of cash from a company's investments. Purchases or sales of assets, loans made to vendors or received from customers, or any payments related to mergers and acquisitions (M&A) are included in this category.

Cash Receipts from customers are cash flow from operating activities.

Cash flow example from an operating activity is Interest Paid on Term Deposits by a Bank. Explanation: When producing a Cash Flow Statement, interest paid on term deposits by a bank is considered an operating activity.

To calculate cash flow from investing activities, add the purchases or sales of property and equipment, other businesses, and marketable securities. These items are all listed in a cash-flow statement, but can also be identified by comparing non-current assets on the balance sheet over two periods.

A negative investing cash flow ratio means that a company spends more of its operating cash flow on its investing activities than it receives from them. A positive investing cash flow ratio means that a company receives more of its operating cash flow from its investing activities than it spends on them.

In most situations, when you purchase an investment or security, your money can grow in two ways: (1) periodic payments in the form of either dividends (from stocks) or interest (from bonds) and (2) a change in value when you sell the security.

The cash flow from operating activities depicts the cash-generating abilities of a company's core business activities. It typically includes net income from the income statement and adjustments to modify net income from an accrual accounting basis to a cash accounting basis.