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Explanation: Cash From Financing Activities is the amount of cash a company receives or spends due to activities related to its financing, such as issuing or repurchasing stocks, issuing bonds or taking loans. It shows the inflow or outflow of cash from sources like investors, creditors, or lenders.
Example: In FY23, TCS had a Cash Flow from Financing Activities of -47,878 crore. This negative value indicates that TCS spent 47,878 crores more cash on financing activities than it received. Possible reasons for such spending could include repurchasing its own shares, paying off debts, or distributing dividends to shareholders.
In the case of TCS, if they repurchased shares or paid off debts during FY23, it would result in a negative cash flow from financing activities. This negative value doesn’t necessarily mean TCS is in financial trouble; it could be a strategic decision to optimize its capital structure or return value to shareholders.
Understanding Cash from Financing Activities helps investors evaluate how a company is funding its operations and growth, as well as its ability to manage its capital structure effectively.
You can view the Cash from Financing for any company on Radar in the Cash Flow section.