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Financing Activities and Cash Flow from Financing Activities.

Answer»

Financing activities means changes in owner’s capital and borrowed capital of business. Financing activities have relation with increase or decrease of equity share capital, preference share capital, debenture, loan ect. It means that the increase in long-term owner’s capital and borrowed capital shows cash inflow and their reduction shows cash outflow of financing activities. Calculation of cash flow of financing activities is depends upon

  • Capital and Liability side of balance sheet and
  • Appropriation of profit of profit of loss statement.

Cash Flow From Financing Activities

ParticularsAmt (₹)
Issue of Equity/Preference share……….
Issue of Debentures……….
Procurement of loan and creation of long term liabilities……….
Increase in bank overdraft……….
Buy back of equity shares(………..)
Redemption of preference shares(………..)
Redemption of debentures(………..)
Reduction in bank overdraft(………..)
Redemption of loan or any other long-term liabilities(………..)
Dividend paid on equity/preference share capital(………..)
Interest paid on debt or bank loan(………..)
Net Cash Flow from Financing Activities………..


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