The-definition.com

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

  • Multidomestic Strategy
    Multidomestic strategy is an international expansion strategy in which firms compete for ...
  • Advertising
    Advertising refers to any paid form of non personal presentation and promotion of ideas, ...
  • Constant ratio method of forecasting
    Constant ratio method of forecasting refers to a forecasting approach using the percent-of-sales ...
  • Equity Financing/ Funding
    Equity financing (or funding) is a most common alternative for raising money that means ...
  • Common Stock
    Common stock refers to the stock that is issued more broadly than preferred stock and ...