Financial Education

Cash flows from financing activities are those that take place between a firm and its investors. These include both the equity investments of stockholders (owners) and the loans from bondholders and other creditors. When the company issues new shares or debt in exchange for cash it records a cash inflow from financing, and when it repurchases shares, pays dividends (with some exceptions under IAS) or pays off debt it records a cash outflow. This section of the cash flow statement is typically related to activities in the non-current liabilities and owners’ equity section of the balance sheet. Under IAS, cash interest payments may also be included here.

For more information, see all articles on: Accounting, Financial Statement Analysis, Fundamental Analysis

See also:

The Statement of Cash Flows

Reclassifying Pension Related Cash Flows for Analysis Purposes

Cash Flows from Investing Activities

Cash Flow from Financing Activities

Cash Flow from Operating Activities