Question

In: Accounting

Investing Activities Where does the primary investing cash outflow come from? Does it provide information about...

Investing Activities

Where does the primary investing cash outflow come from? Does it provide information about " operational investment"

Solutions

Expert Solution

The Primary investing cash flow comes from the core core business activities but the net income from the comoany is profitabily measured thefore we need to make cearian change to make it for cash flow. From the net income we need to add back depreciation, Unrelized gains, decreases in the taxes; all the non cash expenses would be added back and all the unrealized gains woild be deducted from the net income of the company an example is let takes emirates airlines they have many businesses and they have invested in many football clubs and many other industry but there main business is Airline industry that is one of the example for primary investing cash flow comes from. Yes, the investing cash flow provides information about additional investment made by the company through increase in depreciation compare to last year or if any assest is sold there can be seen in the depreciation by a drop in its value and if there is any impairent loss in the property value can also be seen from the primary investing cash flow of the compny.


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