CHARLIE TETLOW ASS 2

Operating, Investing and Financial Cash Flows

Introduction

With the exception of smaller organisations, all limited corporations are required by the Companies Acts
to provide a cash flow statement along with their final accounts. The sources of the finances (money)
and their uses during the course of the year should be made abundantly clear in this. This could be used
in the future to assess how well the fiscal year went, or to identify what went wrong and figure out how
to fix it for the coming fiscal year.

Operating

Operating Activities are what you do on a daily basis. Included are all operations receipts and outlays
that have been accrued and paid. Additionally mentioned are changes to current assets and liabilities.
Your cash flow estimate will typically include documentation of operating operations. These actions will
show a stakeholder whether a firm's regular activities are enough to support its ability to continue
trading. Expenses, debt repayments, and dividend payments to shareholders should all be covered by
operating operations. Additionally, they need to make it possible for the business to make new
investments in fixed assets and other sectors without having to look for outside funding. The working
capital situation of the company has changed.

Investing

The buying and selling of fixed assets are considered investment activities (both tangible and intangible).
These are crucial to the long-term functioning of the business. They cover loans to other firms and their
repayment in addition to the purchase and sale of fixed assets. Normally, the balance sheet includes
information on investing cash flows (but not including the working capital section). The company's
investing actions show whether it is reviewing its fixed assets and investments. We would anticipate
investing initiatives within a business that is expanding and keeping up with technological advancements
and other considerations.

Financing

investments that can be acquired or repaid through financing. The third category of operations is
financing.

a type of activity that affects cash flow. Examples of cash sources include the sale of stocks and
borrowing money from a bank or another business (perhaps as a debenture). Two examples of using
cash include paying off loans and buying back (or redeeming) shares. In a perfect world, a company
would want to grow using money from its operating activities, but this is sometimes impractical,
especially if it wants to grow quickly. Selling shares or taking out a loan are quick ways to finance new
fixed assets.

My Cash flow
CHARLIE TETLOW ASS 2