How do you do the Direct Cash Flow in Financing Activities?

Based on the above information, compute net cash flow from financing activities under GAAP?

  • Purchase of investments $ 320 Dividends paid 900 Interest paid 360 Additional borrowing from bank 1,050

  • Answer:

    bank borrowing - a cash inflow: 1,050 divs paid - outflow: (900) net CF Fin'g: 150 (positive number!) int paid is CFOps purchase of investments is CFInvesting if the assets are NOT held for trading (if held for trading it's CFOps)

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= +1,050 -320 -900 -360 = -530 or (530)

funky ninja

Only Dividends paid and Bank borrowing are Financing activties.Net negative 150 cash flow

Don G

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