What is Cash Flow from Investing Activities?
Cash flow from investing activities tracks cash spent on or generated from long-term assets and investments. Typical items include purchases and disposals of property, plant and equipment, acquisitions of other businesses, and purchases or sales of financial investments not held for trading.
How It Works
- Subtract cash paid for new fixed assets and acquisitions.
- Add cash received from selling fixed assets, subsidiaries or investments.
- Include cash advances and loans made to other entities.
- Report the net figure as the second section of the cash flow statement.
Saudi Context
Saudi industrial firms expanding capacity under Vision 2030 frequently report large negative investing cash flows from new factory and infrastructure spending.
Example
If a company buys equipment for SAR 50 million and sells a subsidiary for SAR 20 million, investing cash flow is -SAR 30 million.