Trading Securities in CFO

It seems like unrealized gains/losses on trading securities would be a non-cash transaction recorded in OCI.

I just took a Schweser quiz where they qualified unrealized trading security gains as a subtraction on CFO.

I could see how an increase in cash, even unrealized, would be an increase of a current asset, thusly being subtracted from the CFO, but why is this not noncash?

Nope; unrealized gains/losses on trading securities go through the income statement.

Unrealized gains/losses on available-for-sale securities go to OCI.

Noted, thanks for the reply!

That said, why are unrealized gains on trading securities recognized as a subtraction on CFO?

There are a handful of questions I’d like to ask surrounding this if you don’t mind.

Another is, “profit” from sales of PPE are consistently described as CFO, yet purchases/sales of PPE without being tagged as “profit” are consistently described as CFI. What is the basis of this distinction?

The gain is included in net income, but it’s not a cash inflow (it’s unrealized). So, to get to the cash inflows, we have to subtract it.

The gain/loss from the sale of PP&E is included on the income statement. However, selling PP&E is not an operating activity (e.g., McDonald’s is not in the business of selling used french fry machines), so it’s subtracted. Not because it’s not cash, but because it’s not operations.