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When a company pays cash to repurchase its own common stock, this is reported as a cash outflow in the financing activities section of the statement of cash flows.
Financing Activities
Transactions related to acquiring or repaying capital, such as issuing stocks, bonds, or taking out loans.
Cash Outflow
Money going out of a business in the form of payments, including expenses, investments, and other financial obligations.
Common Stock
Shares representing ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends or stock price appreciation.
- Become acquainted with the elements and their respective classifications in the cash flow statement.
- Systematically identify and categorize activities under operating, financing, and investing.
- Assess the implications of debt and equity operations on the financing section within the statement of cash flows.
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Learning Objectives
- Become acquainted with the elements and their respective classifications in the cash flow statement.
- Systematically identify and categorize activities under operating, financing, and investing.
- Assess the implications of debt and equity operations on the financing section within the statement of cash flows.
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