name any two investing activities that result into inflow of cash
Answers
Cash flow from investing activities is an item on the cash flow statement that reports the aggregate change in a company's cash position resulting from investment gains or losses and changes resulting from amounts spent on investments in capital assets, such as plant and equipment.
When analyzing a company's cash flow statement, it is important to consider each of the various sections that contribute to the overall change in its cash position. Negative cash flows are not always indicative of poor performance. Often, firms have negative overall cash flows for a period because of heavy investment expenditures.
Cash Flow From Investing
Cash flow from investing activities is an important aspect of growth and capital. Changes to property, plant, and equipment (PPE), a large line item on the balance sheet, are accounted for here. When analysts want to know how much a company spends on PPE, they can look for the sources and uses of funds in the investing section of the cash flow statement.
Capital expenditures (capex), also found in this section, is a popular measure of capital investment used in the valuation of stocks. An increase in capital expenditures means the company is investing in future operations; however, it also points to a reduction in cash flow. Companies with high capital expenditures are generally in a state of growth.
Examples of negative cash flow from investing activities include the purchase of fixed assets, the purchase of investment instruments (e.g., stocks), and lending money. Examples of positive cash flow from investing include the sale of fixed assets, the sale of investment instruments, and the collection of loans and insurance proceeds.