Capital purchases, loan of funds, and the sale of investment securities are all included in cash flow from investing operations. Additionally, because they constitute a long-term investment, expenditures on property, plant, and equipment are included in this category.
Recognizing Cash Flow from Investment Activities
It's crucial to understand where an organization's investment activity fits into its financial statements before studying the various positive and negative cash flows from investing operations. The cash flow statement, income statement, and balance sheet are the three primary financial statements.
The balance sheet gives a summary of the assets, liabilities, and owner equity of a corporation as of a particular date. An summary of the company's earnings and outlays for a time period is given by the income statement.
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