How does an M&A acquisition flow through the cash flow statement?

The closing effect — three main lines:

• Investing cash flow: the purchase price less the target's acquired cash position ('net cash acquired') — typically shown as 'acquisition of subsidiaries, net of cash acquired'.
• Financing cash flow: if the acquisition is financed with new debt — the raise shows as an inflow; if via equity issuance — also an inflow.
• OCF: in the year of acquisition and after, the target's performance runs consolidated through net income and WC changes — Δ AR/AP includes the target's movements from closing onward. Watch the modeling trap: 'cash acquired' is typically netted in investing — you do NOT see the gross purchase price in the cash flow statement, only the net effect. The gross purchase price sits in the acquisition disclosure (note).