From the course: Reading Corporate Financial Statements

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The impact of investing activities on the cash flow statement

The impact of investing activities on the cash flow statement

From the course: Reading Corporate Financial Statements

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The impact of investing activities on the cash flow statement

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- We look in our bank account and notice that our balance has increased during the year by $200,000. We started the year with $1 million and now there's $1.2 million, and in our last video, we determined that $30,000 of that change was from operations by doing what we're in business to do. Let's figure out where the rest of the increase of $200,000 came from by building on this statement of cash flows. Do you suppose we made any investment decisions this period? Did we buy or sell any equipment? Did we take excess cash and invest it in marketable securities or other investments? The next section of the statement of cash flows is the investing section and this requires us to think about the investment decisions made during the year. The three most common investing decisions are to buy or sell equipment, to buy or sell investments, or to buy or sell subsidiaries. Imagine with me that we take a look at the books and see that…

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