Definition

Activities of Statement of cash flows

The statement of cash flows is divided into three separate activities: operating activities, investing activities, and financing activities. These activities, which are explained in the following list, are the activities from which a firm obtains and uses cash:

  • Operating activities include net income (or loss), depreciation, and changes in current assets and current liabilities other than cash and short-term debt. A firm’s net income taken from its income statement is the first line on the corresponding period’s cash flow statement.
  • Investing activities include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
  • Financing activities include cash raised during the period by borrowing money or selling stock and/or cash used during the period by paying dividends, buying back outstanding stock, or buying back outstanding bonds.
Share it:  Cite

More from this Section

  • Budgets
    Budgets are itemized forecasts of a company’s income, expenses, and capital needs and ...
  • Why Conduct an Intellectual Property Audit?
    There are two primary reasons for conducting an intellectual property audit. First, it ...
  • Strategic Partners
    Strategic partners are a source of capital for new ventures which often play a critical ...
  • Invention logbook
    An invention logbook refers to the documentation of the dates and activities related ...
  • Supplier & Supply chain
    A supplier is a company that provides parts or services to another company. For example, ...