Cash Flow from Investing Activities Cash flow from investing activities (CFI) is a section of the cash flow statement that reports cash generated or spent on investment-related transactions during a reporting period. It shows how a company allocates cash to long-term assets and investments that affect future operations and growth. What counts as investing activities Investing activities typically include cash flows related to:
Purchases and sales of property, plant, and equipment (PPE)
Capital expenditures (CapEx)
Purchases and sales of marketable securities or other investments
Proceeds from maturities of investments
* Cash paid for acquisitions or received from disposals of businesses or long‑term assets Explore More Resources
Purchases are cash outflows (negative CFI); sales and maturities are inflows (positive CFI). How CFI fits with other cash flow sections The cash flow statement has three sections:
Operating activities — cash from core day‑to‑day business (sales, operating expenses, working capital).
Investing activities — cash used for or provided by long‑term asset and investment decisions.
* Financing activities — cash from or used to fund the company (debt, equity, dividends, buybacks). Explore More Resources
Analyze the cash flow statement together with the balance sheet and income statement to understand a company’s liquidity, investment strategy, and financial health. Example (illustrative) An example cash flow profile from a large tech company over a 12‑month period included:
Negative (outflows):
Purchases of marketable securities: $29.52 billion
Payments for property, plant, and equipment: $10.96 billion
* Other investing payments: $1.34 billion Explore More Resources
Positive (inflows):
Proceeds from maturities of marketable securities: $39.69 billion
Proceeds from sale of marketable securities: $5.83 billion Net cash flow from investing activities in this example: $3.71 billion (positive), despite substantial purchases. Explore More Resources
How to calculate CFI CFI = Sum of cash inflows from investing activities − Sum of cash outflows on investing activities Example calculation:
CapEx: −$30B
Purchases of investments: −$5B
Acquisitions: −$1B
Sales of investments: +$3B
Net CFI = −$30B − $5B − $1B + $3B = −$33B Explore More Resources
Interpreting investing cash flow
* Negative CFI is common and not always bad. It often indicates investment in growth (CapEx, acquisitions, R&D) that may reduce cash now but increase future cash generation.
* Positive CFI can indicate asset sales or maturities of investments; if persistent, it may signal underinvestment.
* Assess CFI alongside operating cash flow: healthy growth usually combines investment spending with strong operating cash generation or sustainable financing.
Key takeaways
* CFI reports cash used for or provided by long‑term investments and asset transactions.
* It can be positive or negative; context matters—negative CFI often reflects growth investment, while positive CFI can reflect divestitures.
* Review CFI together with operating and financing cash flows, and compare trends over time to evaluate a company’s investment strategy and financial health.