Investing activities
Investing activities are the second section of the statement of cash flows, reporting cash paid to acquire non-current assets and cash received from their disposal; persistent outflows here signal capital investment in long-term capacity.
FrameworkCash flow statement
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Investing activities report cash tied to non-current assets: outflows for capital expenditure, acquisitions and financial investments, and inflows from disposing of assets or having loans repaid. Persistent outflows well above the depreciation charge signal a company building productive capacity for the future.
Check yourself
Kelford plc's cash transactions for the year include: proceeds from selling a factory building €500,000; dividends paid to shareholders €150,000; purchase of manufacturing equipment €320,000; repayment of a bank loan €200,000. Which transactions appear in the investing activities section of the cash flow statement?