Cashflows

Question 1

The three types of cashflow activities?

Answer 1

• Operating activities (daily business)
  
  • Investing activities (buy/sell assets)
  • Financing activities (borrow, repay, pay dividends)

Question 2

What are operating activities comprised of?

Answer 2

Operating activities = create revenues, expenses, and changes to our current assets and liabilities (gains, and losses) (info from income statement)
—> involves day to day transactions (salary, utility costs etc)

Question 3

What are investing activities comprised of?

Answer 3

increase and decrease non-current assets, such as PPE, intangible assets, and investments in other companies. LONG TERM ASSETS (info from the balance sheet)

Question 4

What are financial activities comprised of?

Answer 4

where we obtain cash from, and pay cash to, investors and creditors. Issuing shares, borrowing money, buying and selling treasury shares, and paying cash dividends are financing activities —> LONG TERM LIABILITIES, where are we getting our money from?
shares, dividends and loans (info from changes in equity statement)