Operating, Investing, and Financing Activities The cash flow statement is a financial statement that tracks the inflows and outflows of a company over a...
The cash flow statement is a financial statement that tracks the inflows and outflows of a company over a period of time. These activities include operating, investing, and financing.
Operating activities encompass all the day-to-day activities of running the business, including:
Producing goods and services
Purchasing raw materials and supplies
Selling goods and services to customers
Paying employees and managing expenses
Investing activities involve the use of funds to purchase assets that generate revenue in the future, such as:
Purchasing equipment and machinery
Investing in stocks and bonds
Leasing assets
Financing activities involve the company's relationship with its creditors and investors. This includes:
Borrowing money
Issuing shares of stock
Paying dividends
By analyzing the changes in the operating, investing, and financing activities, a company can gain insights into its financial health, solvency, and ability to generate cash in the future