Quick Tips From Success Coach Mike Eisenhuth – Cash Flow Financing Activities

Financing activities as indicated on the Cash Flow Statement include your business’s cash flow to and from investors, banks, and shareholders. They include, but are not limited to:

  • the sale or repurchase of company stock
  •  dividend payouts to shareholders
  •  proceeds from and the repayment of debt principal (including capital leases)
  •  payment of dividend taxes
  •  additions and changes to loans

 

These activities are an effective measures of cash flow between your business and your creditors. The “cash flow from financing activities” line of the Cash Flow Statement also shows potential investors and lenders how efficiently your business uses financed cash. As with investing activities, purchases result in a negative number, and sales result in a positive number on the Cash Flow Statement. Financing activities are critical for large organizations that rely on shareholders to keep it operational. If your sole proprietorship consistently operates with minimal debt, you may go entire accounting periods without entering numbers on the “cash flow from financing activities” line. However, it is still important for you to know how these activities affect your cash flow, as these they can significantly offset cash inflows and outflows resulting from operating activities and can help stabilize your business’s cash flow.

 

LEARN MORE

 

Mike Eisenhuth
Mike Eisenhuth
mike.eisenhuth@landopt.com

As a Success Coach, Mike works closely with the Success Coaching team to deliver products and services to the LandOpt Network of Contractors. This includes providing the coaching, training and mentoring support necessary to guide each contractor from the initial kick-off phase through the transformation process. This includes, but is not limited to, weekly PAR calls, monthly site visits and role-specific training in the Pittsburgh training center

No Comments

Post A Comment