Cash from Investing

Cash from investing is a term used in accounting and finance to refer to the cash that a company generates or uses from its investing activities, such as buying or selling long-term assets, investments in other companies, or acquisitions of other businesses.

This figure is reported in a company's statement of cash flows and reflects the cash inflows and outflows related to the company's investing activities during a given period of time, typically a quarter or a year.

Some examples of investing activities that can affect the cash from investing figure include the purchase or sale of property, plant, and equipment, the purchase or sale of stocks, bonds, or other investments, and any cash paid for the acquisition of another company.

A positive cash from investing figure indicates that the company is generating cash from its investing activities, while a negative figure suggests that the company is using cash to fund its investments.

It is important to note that cash from investing is just one component of a company's overall cash flow, and should be analyzed in conjunction with other financial metrics to gain a full understanding of the company's financial health.

Examples:

Let’s calculate Apple's cash from investing activities for its fiscal year 2021:

  • Purchase of marketable securities: $99.2 billion
  • Proceeds from maturities of marketable securities: $53.8 billion
  • Proceeds from sales of marketable securities: $36.8 billion
  • Payments for acquisitions of property, plant and equipment: $9.9 billion
  • Payments for acquisitions of intangible assets: $1.6 billion

To calculate cash from investing, you would subtract the outflows from the inflows:

Cash from Investing = Proceeds from Sales of Marketable Securities + Proceeds from Maturities of Marketable Securities - Purchase of Marketable Securities - Payments for Acquisitions of Property, Plant and Equipment - Payments for Acquisitions of Intangible Assets

Cash from Investing = $36.8 billion + $53.8 billion - $99.2 billion - $9.9 billion - $1.6 billion

Cash from Investing = -$20.1 billion

In this example, Apple used $20.1 billion of cash from its investing activities during fiscal year 2021. This negative cash from investing figure suggests that Apple is using cash to fund its investments, rather than generating cash from them.