GENERAL KNOWLEDGE

Detailed explanation-1: -Assets included in investment activity include land, buildings, and equipment. Receiving dividends from another company’s stock is an investing activity, although paying dividends on a company’s own stock is not. An investing activity only appears on the cash flow statement if there is an immediate exchange of cash.

Detailed explanation-2: -Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets. Negative cash flow from investing activities might not be a bad sign if management is investing in the long-term health of the company.

Detailed explanation-3: -Operating activities include cash activities related to net income. Investing activities include cash activities related to noncurrent assets. Financing activities include cash activities related to noncurrent liabilities and owners’ equity.

Detailed explanation-4: -Issuing and repurchasing equity. Borrowing and repaying short-term and long-term debt. This activity includes principal payments to lenders and vendors for most capital purchases, as well as the cost to issue debt. Paying dividends. Other contributions from, or distributions to, owners.