What are some examples of financing activities on the cash flow statement?

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Harold Averkamp, CPA, MBA

Definition of Financing Activities

Financing activities reported on the statement of cash flows (SCF) involve changes to the long-term liabilities, stockholders’ equity, and short-term borrowings during the period shown in the heading of SCF.

Examples of Financing Activities

Sources of cash provided by financing activities include:

• Borrowing money on a short-term basis and/or long-term notes basis from a bank or other lenders
• Issuing bonds payable
• Issuing common stock
• Issuing preferred stock
• Sale of treasury stock
• Other increases in long-term liabilities and stockholders’ equity

Uses of cash reported in the financing activities section of SCF include:

• Repayment of short-term loans and/or long-term loans
• Retirement of bonds payable
• Purchase of a company’s own stock (treasury stock)
• Declaration and payment of dividends
• Other decreases in long-term liabilities and stockholders’ equity

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