What are the three primary sections of the statement of cash flow?
The three primary sections of a statement of cash flow (or cash flow statement). These are sections for operating activities, investing activities, and financing activities.
Operating activities are the transactions related to the basic operations of the business. This is where money paid out to buy materials and paid in for finished products is recorded.
The investing activities section is where transactions having to do with long-term purchases and also investment securities. When a firm buys a large piece of equipment that will be used for a long time, the purchase is recorded here. So are purchases of bonds.
Finally, the financing activities section involves the raising of money. When a firm borrows money from a bank, the transaction goes here. When it sells stocks or bonds, the transaction goes here. When they pay dividends on their stock, it goes here.