Confused with CFO, CFF, CFI

Its something i see a lot and it confuses, does someone have a list of the components that go into each one, like for example how Interest income goes into CFO

Hello Hamada,

Interest or dividend income may or may not be a part of operating activities. However, as per Financial Accounting Security Board’s (FASB) classification interest or dividend income shall be a part of operating activities.

As per FASB’s classification,

CFO includes:

Cash in: Sale of goods or services, Interest revenue, Dividend revenue

Cash Out: Inventory purchases, Payroll, Taxes Interest expense, other (utilities, rent, etc.)

CFI includes:

Cash in: Sale of plant assets, Sale of a business segment, Sale of investments in equity securities of other entities or debt securities (other than cash equivalents), collection of principal on loans made to other entities

Cash Out: Purchase of plant assets, Purchase of equity securities of other entities or debt securities (other than cash equivalents), loans to other entities

CFF includes:

Cash in: Issuance of own stock, Borrowing (bonds, notes, mortgages, etc.)

Cash Out: Dividends to stockholders, Repaying principal amounts borrowed, Repurchasing business’ own stock (treasury stock)

Thanks and Regards,

Kailas Kale

Thanks thats really helpful

This will help you alot for the exam.

Imagine a T-Balance Sheet

On the Top Left Side you have current assets and on the top right side you have current liabilities. That would normally go under CFO. Know this because EBIT is pretty much the Operating income.

For CFI, It is pretty much Non-current assets.

For CFF, It would fall under Non-current liabilities/equity.

Think of circling each section when you think about converting it into the cash flow statement.

There are stipulations to this but it will give you a basic idea of what goes under what. And also, what I personally have trouble on is what is an inflow and outflow for the cash flow statements.

Good luck

double post