The purchase with bonds should be disclosed in a separate schedule, whereas the purchase with cash should be included in cash flows from investing activities.
What is revealed by the cash flow from investing activities?
Cash flows from investing activities frequently reflect cash flows related to cash the company has loaned to others, whereas cash flows from financing activities frequently reflect cash flows related to cash the company has borrowed from others.
To assess the liquidity and solvency of the company, organizations should monitor and analyze three different types of cash flow: cash flow from operating operations, cash flow from investing activities, and cash flow from financing activities. The cash flow statement of a corporation includes all three.
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