Reading 28- Example 6 Blue Box - Cash Flow from Financing

The below is related to the calculation of the free cash flow to equity.

I noticed that in couple of examples as well as in the EOC, that under the financing activities section of the cash flow statement, the amount being raised through notes payable and long term financing issuances are in brackets. I read it as paying off the debt, however, as per the solution, this is represented as borrowing. I am able to solve the example when I look at the balance sheet, but when I look at the cash flow statement only, my FCFE is wrong.

Did anyone else encounter the same issue or is it just me that cant read the financial statement?

You gotta see the context and see what other items are inside the CFS.

For example, if they show common dividend payment as a positive number (which is a cash outflow), then notes payable with a negative number would mean debt issued (cash inflow).

And another clue is in the subtotal heading.

Sometimes they use "Cash used for " (cash outflow) and “Cash provided by” (cash inflow).

Sometimes they just use “Cash Flow from xxx Activities” for all and if you see positive numbers, it would mean cash inflows; negative numbers would mean cash outflows.

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thanks. Ill try to solve another problem and see if i understood what I am doing wrong

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