What would be a cash outflow shown in the financing section?

1 answer

A cash outflow in the financing section of a cash flow statement typically represents transactions that affect a company's capital structure. Some examples of cash outflows in the financing section include:

  1. Repayment of Debt: Payments made to pay back loans or other forms of debt.
  2. Dividends Paid: Cash distributed to shareholders as dividends.
  3. Repurchase of Stock: Cash used to buy back shares from shareholders, reducing equity.
  4. Payment of Financing Fees: Cash paid for issuing debt or equity, such as underwriting fees.

These cash outflows indicate how the company is managing its capital structure and returning value to its investors.