Why is the cash flow from investing activities noted as a negative value on the CF statement?
It isn’t always negative, but it is often negative.
Do you want to see a company growing, or shrinking?
when a company receives cash from investors, is it designated as positive or negative transaction on the investing activities portion of the CF statement?
It’s a cash inflow from _ Financing _.
Say we have CF from investing activities of $-10,000. Which would entail we have made more cash investment purchases than cash sales of those investments.
Why would we have to subtract off-10,000 in computing the accruals ratio from the CF statement?
I do not understand the logic.
Being able to invest $10,000 is a good thing; it suggests that we have more than enough cash flow to keep the company running. Therefore, we add $10,000 to the numerator of the cash flow accrual ratio, increasing the ratio.
Negative CFI meaning: more investing outflow than inflow
Positive CFI meaning: more investing inflow than outflow