Module I· Cash Flow Statement ConstructionIntermediate
Question
Which items belong in financing cash flow?
Answer
Standard financing items:
- Debt raises — bond issuance, new bank loans, private placements, revolver drawdowns.
- Debt repayments — bond redemptions, bank-loan amortization, revolver repayments.
- Equity issuance — IPO, capital increase.
- Share buybacks — either as treasury stock or a direct reduction in equity.
- Dividend payments to shareholders.
- Dividend payments to minorities (non-controlling shareholders of subsidiaries).
- Cash effects from lease repayments under IFRS 16 (see the IAS 7 restatement since 2019). Convention: cash inflow positive, cash outflow negative.
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Pitch tip
Financing cash flow mirrors capital policy — heavy buybacks alongside a stable debt structure signal mature-stage free-cash-flow generation (Allianz, Siemens), whereas a build-up in net debt signals growth or M&A.