Cash Flow from Investing Activities

Cash Flow from Investing Activities

On a cash flow statement, an item summarizing the change to a company's cash flow from its investments in securities. Cash flow from investing activities includes capital gains and losses. It is important to the cash flow statement because investments in securities may result in negative cash flow even when the company is otherwise profitable. Depending on the liquidity of the company's portfolio, the negative cash flow may actually be positive.
References in periodicals archive ?
Statement of Cash Flows January 1, 2012 through september 30, 2012 Operating Activities: Net Income $20,000 Plus Expenses Not Using Cash: Depreciation $10,000 Plus Increases/(Decreases) in Current Liabilities: Trade Payables $20,000 Other Payables ($4,000) Accrued Liabilities $2,000 Less Decreases/(Increases) in Current Assets other Than Cash: Accounts Receivable ($30,000) Inventory ($10,000) CASH FLOW FROM OPERATIONS $8,000 Investing Activities: Plus Sale of Equipment $25,000 Less Purchase of Equipment ($150,000) CASH FLOW FROM INVESTING ACTIVITIES ($125,000) Financing Activities: Plus Borrowing $150,000 Minus Repayment of Debt ($50,000) Minus Dividends ($10,000) CASH FLOW FROM FINANCING ACTIVITIES $90,000 NET CHANGE IN CASH ($27,000) BEGINNING CASH $50,000 ENDING CASH $23,000
Note that any acquisition of capital assets that is not paid for with cash but instead is financed from external sources would not typically be accounted for under cash flow from investing activities nor would the financing be accounted for under cash flow from financing activities.
30, 2008 2007 2007 Cash Flow from Operating Activities 1,635 489 2,849 Cash Flow from Investing Activities (2,479) (3,482) (4,631) Cash Flow from Financing Activities (1,203) (458) (102) Cash and Cash Equivalents at Period End 15,814 16,487 17,848
Under SFAS 95, NCFO is $108,000 and net cash flow from investing activities (NCFI) is -$50,000.
The next section is called cash flow from investing activities.
With respect to financing and investing cash flows, Livnat and Zarowin (1990) reported that disaggregation of net cash flow from financing activities (NCFF) improved the association with stock returns, while disaggregation of net cash flow from investing activities (NCFI) yielded no improvement.
76 Consolidated Cash Flows Three months ended December 31, 2007 2006 Cash Flow from Operating Activities 4,914 39,831 Cash Flow from Investing Activities (103,035) (92,793) Cash Flow from Financing Activities 126,243 65,862 Cash and Cash Equivalents at Period End 334,003 315,294 Three months ended December 31, 2007 2006 Cash Flow from Operating Activities 139,532 160,601 Cash Flow from Investing Activities (280,912) (213,101) Cash Flow from Financing Activities 145,993 65,325 Cash and Cash Equivalents at Period End 334,003 315,294
The following formula was used to calculate free cash flow: Free cash flow = Cash flow from operating activities + cash flow from investing activities
31, 2006 2005 2005 Cash Flow from Operating Activities 1,006 (1,885) (603) Cash Flow from Investing Activities (2,820) 282 (3,202) Cash Flow from Financing Activities (721) (542) (567) Cash and Cash Equivalents at Period End 31,468 34,627 32,557
30, 2005 2004 2005 Cash Flow from Operating Activities (930) (52) 1,612 Cash Flow from Investing Activities 3,223 (53) (2,689) Cash Flow from Financing Activities (202) (96) 19 Cash and Cash Equivalents at Period End 13,280 12,226 11,186
Cash flow from investing activities represented an outflow of EUR 39.
Cash flow from investing activities in 2007 consumed $25,020,248, up 70.