Investment Cash Flow
Financial StatementsSponsored Content

Curriculum Content
Investments made by a company also affect cash flow. Investment Cash Flow is devoted to recording these changes. Cash flows into a company when investments generate cash payments. As a general rule, if investment cash flow has large inflows, they have sold investments, acquired dividends, received other payments from investments, or had investments mature. If an outflow occurs the company is typically purchasing investments for the future. As an investor, you should look into the footnotes to see if any specific investments are listed.
It is important to note that a re-evaluation or a write-off of an investment does not affect cash flow. Investment Cash Flow only measures the actual cash that flows into the business or out of the business relative to investments.
Capital Expenditures/Tangible Fixed Assets
Capital Expenditures are tangible fixed assets. Commonly called plant, property, and equipment, any asset held longer than a year qualifies. Cash inflows occur when businesses sell these investments, and outflows occur due to the purchase or construction costs of these investments. Depreciation does not affect Capital Expenditures on the cash flow statement since depreciation or amortization does not affect cash flow. In actual cash flow calculation, depreciation is added back since it’s unaffected by cash flow.
Problems with Capital Expenditures
The biggest problem is that capital expenditures actually do depreciate and need to be replaced. The real world reality is not represented on the cash flow statement. Companies that need to consistently make large outflows on capital expenditures spend money that could be used on investments, dividend payments, expanding marketing and sales outreach, or many other things that earn shareholder returns. You should find companies that grow while making low outlays of capital expenditures. Companies forced to spend large sums on capital expenditures depress their earnings or finance the cost. If they’re selling shares to raise capital, they dilute your holdings and per share returns. If they’re entering loans, they hamper long term earnings with interest payments.
Sale and Maturity of (-Investment in) Intangible Fixed Assets
Cash Flow from Intangible Fixed Assets displays the company’s investments in stock, bonds, funds, and other investment instruments. Sometimes this category is divided into purchases, showing cash outflows, and sales or maturities, showing cash inflows. You should look through previous statements and view the outflows compared to inflows of the following years, and determine if the company is making investments that are paying off. If possible, identify the investments the firm is making and analyze those as well.
Cash Provided by (-Used for) Investments
Investment Cash Flow displays the total amount of cash earned from investments made by the company. If positive, this shows all cumulative cash inflows from the sales, returns, or maturities of investments. If negative, this shows all cumulative cash outflows from purchasing new investments.
Did we help you? Vote with a Crypto-Donation!
Visit on Steemit!
Support us on Steemit!

Donate Bitcoin
141FSmuHkMSZVsQQtE9GHSPyj6gAonqqWR

Donate Dash
Xr4fdtP78Mh3gnVwAUjjuZRCq3kubaHZ5o

Donate Litecoin
LcrxGsshB2j9SddnZNdLfYMsDqAtw3Dr9v

Donate Iota
LXIVNBVHRYBOHRWNGMBNHOYMT9GBEFTPQMKDUZUYYHGMPXOOEYETMUQZXWXCGWBMTFERLW9LMCKNUDCKAMDOQCNDNZ
Visit on D.Tube!
Support us on D.Tube!

Donate Bitcoin Cash
14NCVeGCZfHf7tiy9N2Yz1mrBNi9m2mQ4S

Donate Ethereum
0xAF7d66B09F34833Ccec1Ed9e4D356D40c09698e5

Donate Ripple
raiZ2rCXLeBTUh2A4voKALZpMxQ88KxZxm

Donate Monero
42byh9AjzB3XXRptSeSfzAGC588HRZgVXAGMay6yYKjjAHinUxdQkxw3Ay1XcziXV86XY57aRqG5kGnJ8LFWmSjmAnUEnYh
International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Imports/Exports
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
Storefront
Investment and Finance, Serviced by Amazon
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.