Cash flows from investing activities and cash flows from financing activities

In this lesson

1. 0:00 Investing activities overview
2. 1:04 Calculating PPE purchases
3. 2:00 Ruby case study setup
4. 3:25 Working out PPE movements
5. 5:27 Grant income calculation
6. 5:53 Financing activities structure
7. 6:57 Calculating lease payments
8. 7:00 Calculating dividends paid
9. 8:18 Cash flow statement format
10. 9:54 Ruby financing activities
11. 13:02 Reconciling opening and closing cash

About this lesson

You'll discover how to work through common line items like purchases and sales of property, plant and equipment, government grants, share issues, lease repayments, and dividends, and how to use the balancing figure technique to find missing cash movements when direct information isn't provided. The lesson walks you through the structure of investing activities, which includes capital expenditure, asset disposals, investments, and grants received. You'll learn how to construct a working schedule for property, plant and equipment by using opening balances, revaluations, depreciation, and disposals to calculate the actual cash spent on new assets. The same principle applies to government grants: you'll use the opening and closing deferred income liability balances to find the actual cash received from the government during the period. For financing activities, you'll explore share issues, new borrowings, lease repayments, and dividend payments. The lesson shows you how to handle both straightforward figures and those requiring calculation—such as working out lease payments by analysing the movement in lease liabilities, or finding dividends paid by examining changes in retained earnings. You'll also see how bonus issues affect share capital and share premium without involving any cash movement. By the end, you'll understand how all three cash flow sections—operating, investing, and financing—combine to explain the total change in cash and cash equivalents for the year, and how to reconcile opening and closing cash balances. Practical worked examples using the Ruby case study demonstrate each technique in context.

Duration: 14m