A company has the following extract from a statement of financial position. 20X7 20X6 $'000 $'000 Share capital 2,000 1,000 Share premium 500 – Loan stock 750 1,000 What is the cash flow from financing activities for the year? A $1,250 inflow B $1,750 inflow C $1,750 outflow D $1,250 outflow

A company has the following extract from a statement of financial position. 20X7 20X6 $'000 $'000 Share capital 2,000 1,000 Share premium 500 – Loan stock 750 1,000 What is the cash flow from financing activities for the year? A $1,250 inflow B $1,750 inflow C $1,750 outflow D $1,250 outflow

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company has the following extract from a statement of financial position.

20X7 20X6

$'000 $'000

Share capital 2,000 1,000

Share premium 500 –

Loan stock 750 1,000

What is the cash flow from financing activities for the year?

A $1,250 inflow

B $1,750 inflow

C $1,750 outflow

D $1,250 outflow

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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