Cash Flow From Investing: Definition and Examples

Lisa Smith is a freelance writer with a passion for financial journalism, contributing to popular media outlets like Investopedia and Bloomberg BNA.

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes.

Hans Daniel Jasperson has over a decade of experience in public policy research, with an emphasis on workforce development, education, and economic justice. His research has been shared with members of the U.S. Congress, federal agencies, and policymakers in several states.

Cash flow from investing is listed on a company's cash flow statement. Cash flow from investing activities includes any inflows or outflows of cash from a company's long-term investments.

The cash flow statement reports the amount of cash and cash equivalents leaving and entering a company.

The sections of the cash flow statement are:

• Cash from operating activities
• Cash from investing activities
• Cash from financing activities

The cash flow statement is useful in measuring how effectively a company manages its cash from operating activities, or day-to-day operating expenses, and its financing activities, how debt and equity is managed.

Cash flow from investing activities involves long-term uses of cash. The purchase or sale of a fixed asset like property, plant, or equipment would be an investing activity. Also, proceeds from the sale of a division or cash out as a result of a merger or acquisition would fall under investing activities.

Any changes in the cash position of a company that involves assets, investments, or equipment would be listed under investing activities.

Companies look to generate positive cash flow. However, companies can have negative cash flow, even profitable companies. For example, a company might be investing heavily in plant and equipment to grow the business. These long-term purchases would be cash-flow negative, but a positive in the long-term.

For more on cash flow and how companies utilize the cash flow statement, please read What Is A Cash Flow Statement?

Revenue is the income generated from normal business operations. Revenue can also be earned by governments and nonprofits.

Accrual accounting is where a business records revenue or expenses when a transaction occurs using the double-entry accounting method.

An income statement is one of the three major financial statements that businesses issue. Learn how it is used to track revenue, expenses, gains, and losses.

Consolidated financial statements show aggregated financial results for multiple entities or subsidiaries associated with a single parent company.

Diluted EPS is a performance metric used to assess a company's earnings per share if all convertible securities were exercised.

The term "fiscal year-end" refers to the last day of a one-year or 12-month accounting period. It is used to calculate annual financial statements.

• About Us
• Terms of Service
• Dictionary
• Editorial Policy
• Advertise
• News
• Privacy Policy
• Contact Us
• Careers
• EU Privacy

We Care About Your Privacy

We and our 100 partners store and/or access information on a device, such as unique IDs in cookies to process personal data. You may accept or manage your choices by clicking below, including your right to object where legitimate interest is used, or at any time in the privacy policy page. These choices will be signaled to our partners and will not affect browsing data.

We and our partners process data to provide:

Store and/or access information on a device. Use limited data to select advertising. Create profiles for personalised advertising. Use profiles to select personalised advertising. Create profiles to personalise content. Use profiles to select personalised content. Measure advertising performance. Measure content performance. Understand audiences through statistics or combinations of data from different sources. Develop and improve services. Use limited data to select content. List of Partners (vendors)