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What are cash flow from Financial activities in accounting?
This part of statement focus on raise of capital and pay back to investors through capital markets. Financial activities include −
- Repayment of equity.
- Payment of dividends.
- Issuance and repayment of debt.
- Capital lease obligations.
If the statement shows the positive, that means, there is an increase in its assets. If the statement shows negative, then the company of its long term debts or dividends.
Formula
Cash flow from financing activities = cash inflow from issuing debt/equity – (Cash paid as dividends + repurchase of debt and equity)
| Financial activities | |
|---|---|
| Positive cash flow | Negative cash flow |
| Issuing equity/stock | Stock repurchases |
| Borrowing debt | Dividends |
| Issuing debts | Paying down debt |
Updated on: 13-Aug-2020
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