What are financing activities in cash flow statement?
Sophia Koch
Updated on January 04, 2026
The financing activity in the cash flow statement focuses on how a firm raises capital and pays it back to investors through capital markets. These activities also include paying cash dividends, adding or changing loans, or issuing and selling more stock.
Where do loans go on cash flow statement?
The interest paid on short-term bank loans is included in the operating activities section of the statement of cash flows.
Is collecting cash on loans made an investing activity?
As the loans made and collected (including the interest) are part of a governmental program, the loan activities are reported as operating activities, rather than investing activities.
Are loans investing or financing activities?
Investing activities. include cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. (Note that interest paid on long-term debt is included in operating activities.)
What is difference between investing and financing?
Financing is the act of obtaining money through borrowing, earnings or investment from outside sources. Investing is the act of obtaining money by building up operations or purchasing investment products such as stocks, bonds and annuities.
Is a loan a financing activity?
If a company borrows money, this is a financing activity. There are some inflows from financing activities including borrowing money or selling common stock. Outflows from financing activities include paying the principal part of debt (a loan payment), buying back your own stock or paying a dividend to investors.
What is the example of financing?
Definition of Financing Activities Borrowing and repaying short-term loans. Borrowing and repaying long-term loans and other long-term liabilities. Issuing or reacquiring its own shares of common and preferred stock. Paying cash dividends on its capital stock.
