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Investment and financing activities

Investment and financing activities

Another part of the Declaration of cash report investment flow that the company has taken in the reporting year. New investments are signs of growth or improving facilities of production and distribution and the ability of the company. Elimination of capital or push himself for much of his work can be good or bad news, depending on what the conduct of such activities. A company generally on some of its assets each year because they are at the end of their service life affect and will be is more used. These assets are disposed of or sold or exchanged to new fixed. The value of an asset at the end of its useful life is the salvage value. The proceeds of the sale of capital assets is reported as a source of money by investing part of the activities of the State of cash flows. It is generally very small quantities.

Just as individuals have sometimes undertaken to fund acquisitions when its internal cash flow is not sufficient to finance the growth of businesses. funding refers to a company to raise capital of the resources of guilt and where, by borrow money from banks and other lending to lending money to the company and by the owners of the extra money in the business. The term also includes the other side, on debt payments and capital back to the owners. It includes distributions in cash by the company of profits to its owners.

Most companies to borrow money in the short term and long term. Most States report only the net increase in cash flow or reduce the debt in the short term, not the total of the amounts borrowed and total payments on the debt. In the Declaration on the long-term debt, however, the total of the amounts and payments on the debt in the long term a year generally reported in the statement of cash flows. These errors are reported as gross figures, instead of the net.

Investment and financing activities - Internet Business Online News


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