![]() When you visit these sites, you are agreeing to all of their terms of use, including their privacy and security policies.Ĭredit cards, credit lines and loans are subject to credit approval and creditworthiness. Bank of America has not been involved in the preparation of the content supplied at unaffiliated sites and does not guarantee or assume any responsibility for their content. Not all materials on Small Business Resources will be available in Spanish.Ĭertain links may direct you away from Bank of America to unaffiliated sites. Bank of America does not deliver and is not responsible for the products, services or performance of any third party. All third party trademarks, service marks, trade names and logos referenced in this material are the property of their respective owners. Bank of America does not warrant or guarantee the accuracy, reliability, completeness, usefulness, non-infringement of intellectual property rights, or quality of any content, regardless of who originates that content, and disclaims the same to the extent allowable by law. The content on Small Business Resources (including, without limitations, third party and any Bank of America content) is provided “as is” and carries no express or implied warranties, or promise or guaranty of success. Any informational materials provided are for your discussion or review purposes only. Consult your own legal and/or tax advisors before making any financial decisions. ![]() The second cash outflow is an investing activity since it is related to the acquisition of a long-term asset.Bank of America, Merrill, their affiliates and advisors do not provide legal, tax or accounting advice. This is because it is related to the production activities of the company. The first cash outflow is an operating activity. Operating cash flow and investing cash flow.Investing cash flow and operating cash flow.How would you classify the cash flow related to paying for shipping expenses of product materials and a new production machine, respectively? Proceeds from the sale of machinery is an example of cash derived from an investing activity.Ī is incorrect because proceeds from the issuance of bonds relate to a financing activity.Ĭ is incorrect because the sale of inventory is an operating activity. Cash received from the sale of inventory.Which of the following would be classified as a cash flow from investing activity? Cash inflows would arise from the issuance of stock or bonds and borrowing, while cash outflows would include cash payments for repurchasing stock and repaying bonds or other borrowings. Cash Flow from Financing Activities: this provides information on cash flows that are derived from acquiring or repaying capital.Such ventures include the purchase or sale of property, plant, and equipment, intangible assets, and investments in the debt and equity issued by other companies and Cash Flow from Investing Activities: this provides information on cash flows that are derived from the purchase and sale of long-term assets and other investments.Further, cash flows from operating activities also include cash receipts and payments arising from dealing or trading in securities (not for investment purposes) Among others, these cash flows include proceeds from the sale of inventory, and from the provision of services or other activities that are not related to financing or investing. Cash Flow from Operating Activities: this provides information on cash flows that are derived from the day-to-day activities of a company.There are three components of the Cash Flow Statement: This information can help users of financial statements (creditors, investors, analysts, etc.) evaluate a company’s liquidity and solvency. The cash flow statement gives information on a company’s cash receipts and payments during a specified period of time.
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