Cash Flow Activities

Operating, investing, and financing cash-flow classifications and their use in financial-statement analysis.

Cash-flow activities explain how an entity generated and used cash during a reporting period. Operating Cash Flow covers principal revenue-producing activities. Cash Flow From Investing Activities covers long-term assets and investments. Cash Flow From Financing Activities covers contributed equity and borrowings.

Use Sources of Funds for the broader funding concept. For valuation cash flows rather than reported statement classifications, continue to FCFF or FCFE.

What to Check

  • Reporting framework, statement period, currency, and cash-equivalent definition.
  • Operating, investing, financing, and noncash classification.
  • Direct or indirect operating-cash-flow presentation.
  • Gross and net amounts, acquisitions, asset sales, capital expenditure, and financing transactions.
  • Reconciliation to beginning and ending cash and the related notes.

Cash-flow-activity content is educational and does not provide accounting, audit, tax, legal, valuation, lending, or investment advice.

In this section

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Financing Cash Flow

Cash flow from financing activities reports cash raised from or returned to lenders and owners through debt, equity, distributions, and related transactions.

Investing Cash Flow

Cash flow from investing activities reports cash used for or received from long-term assets, investments, loans, and business acquisitions or disposals.

Operating Cash Flow

Operating cash flow is the net cash generated or used by an entity's principal revenue-producing activities during a reporting period.

Cash Flow Methods
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