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3 December, 22:41

During the last year, Globo-Chem Co. generated $1,053 million in cash flow from operating activities and had negative cash flow generated from investing activities (-$576 million). At the end of the first year, Globo-Chem Co. had $180 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm's cash flow (CF) due to financing activities in the second year

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  1. 3 December, 23:02
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    Cash Flow due to financing activities in second year is negative = - $377 million

    Explanation:

    Format of Cash flow statement is as follows:

    Cash Generated From Operating Activities

    Add: Cash Generated From Investing Activities

    Add: Cash Generated From Financing Activities

    Add: Opening Balance of Cash

    = Closing Balance of Cash

    Now, putting all the values as stated above Amount in million

    Cash Generated From Operating Activities = $1,053

    Add: Cash Generated From Investing Activities = - $576

    Add: Cash Generated From Financing Activities = x

    Add: Opening Balance of Cash = $180

    = Closing Balance of Cash = $280

    That means $477 + x + $180 = $280

    $657 - $280 = - x

    $377 = - x

    x = $377

    Thus Cash Flow due to financing Activities in second year = - $377 million
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