Summary
Investing Activities represent cash flows related to the purchase and sale of long-term assets and investments. These activities may include capital expenditure, acquisitions, disposals, or investment purchases.
They show how the company is investing for the future.
Why it matters
Investing cash flows help investors understand whether a company is expanding, maintaining, or reducing its asset base. Negative investing cash flow often reflects investment in long-term growth.
Positive investing cash flow may indicate asset sales or investment disposals.
How to read it
Negative investing cash flow is not automatically bad if it reflects productive investment. Positive investing cash flow is not automatically good if it results from selling important assets.
Investors should review investing activities together with strategy, growth, and cash flow from operations.