Investing and financing

Another part of the statement of cash flows reports the investment that the company took during the reference year. New investments are signs of production facilities and distribution capacity of the growing business or upgrade. Of long-term assets or dispose of a substantial part of your business outlet can be good or bad news , depending on what is driving these activities. A company usually has a portion of its fixed assets every year, as they reached the end of its useful life and will not be used longer. These assets are disposed of or sold or traded in new capital . The value of an asset at the end of its useful life is called its salvage value. The proceeds from the sale of capital assets are recognized as a source of cash in the investing activities section of the statement of cash flows. Usually it is very small amounts .
As individuals , companies sometimes to finance their acquisitions when its internal cash flow is not sufficient to fund business growth . funding relates to a business capital funds from debt and quity sources , borrow money from banks and other sources that are willing to lend money to the company and its owners to extra money in business. The term also includes the other side , so that the payment of the debt and return capital to owners. including cash distributions to the company profit to their owners.
Most companies borrow money in the short and long term. Most cash flow statements indicate that the net increase or decrease in short-term debt , not the total amount borrowed and total debt payments . In its report on the long-term debt , however, both total amounts and repayments of debt in the long term for one year are presented in the overall cash flow of the state. They are presented in gross rather than net .