![]() The preparation of a cash flow statement requires careful consideration of all of the company’s activities that could impact its cash position. Source: Preparation of cash flow statement Source: WSJ.com (META) Facebook statement of cash flows (Meta) Facebook statement of cash flows The financing section of cash flow statement also shows if a company is paying dividends or buying back shares (treasury stocks).Įxamples of statement of cash flows Apple’s statement of cash flows 5-year trend 2017 to 2021 Apple’s statement of cash flows 5-year trend 2017 to 2021 ![]() This means the operating section of cash flow statement is important for income stock investors while the investing section of cash flow statement is important for growth stock investors.įor creditors, they are interested in the financing section of cash flow statement because it shows whether a company is actively paying back debt. For investors who are interested in growth stocks, a company with high capital expenditure shows the company is investing in growth and the company would be their choice this means investors interested in growth stocks would look for positive cash flows from investing activities whereas investors interested in income stocks would look for a positive cash flow from operating activities. The purpose of the statement of cash flows is to give investors and creditors an idea of the company’s financial health and liquidity. Statement of cash flows purpose Statement of Cash Flow Purpose Examples of investing activities in cash flow statementįinancing activities of the statement of cash flowsįinancing activities are all the cash flows related to a company’s borrowings and repayments of debt, as well as any dividends or other distributions to shareholders. The cash flow from the investing section is important in identifying the changes in capital expenditures (CapEx). In general, investing activities in cash flow statement are all the cash flows related to the purchase or sale of long-term assets, such as property or equipment. The cash flow statement investing activities include items such as the purchase or sale of investments, proceeds from the sale of property or equipment, and any other investing income or expenses. This section shows the cash inflows and outflows from the company’s investments. Investing activities in cash flow statement
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