For operating activities does current liabilities have a direct or inverse relationship with cash? What is...

For operating activities does current liabilities have a direct or inverse relationship with cash?

What is included in the investing section of the Statement of Cashflow?

What is included in the financing section of the Statement of Cashflow?

Expert Solution

For Operating activities, current liabilities has a direct relationship with cash. If any current liability increases, this adds to the cash balance and when any current liability decreases, it is reduced from cash balance.For example: if accounts payable increases it is considered as cash inflow because company has more cash to keep in business.

Cash flow from investing activities is an item on the cash flow statement that reports changes resulting from amounts spent on investments in capital assets such as plant and equipment, investments.

Ex of Cash flow from Investing activities

Sale of invt

Purchase of PPE

Sale of PPE

A category in a company’s cash flow statement that accounts for external activities that allow a firm to raise capital and repay investors, such as issuing cash dividends, adding or changing loans or issuing more stock.

Ex of Cash flow from Financing activities

Issue of Stock

Issue of additional Paid in capital

Dividends Paid

ekkarill92 answered 1 year ago

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