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Where would a loan to another company or 3rd party be recorded in the cash flow statement?

If a company loans money to an unaffiliated 3rd party, then they presumably are receiving interest on the loan. The cash outflow related to the loan would be recorded in the investing section of the cash flow statement (#2 in the visual below).

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  • What are the three sections of the cash flow statement?

    The three sections are operating, inventing, and financing. The phrase “Oops I forget” is helpful to remember the three section. The “O” in oops represents operating, the “I” represents investing, and the “f” in forget represents financing. The operating section of the statement of cash flows will represent the cash inflows and outflows from operating...

  • What is reported in the investing section of the cash flow statement?

    The investing section includes purchase (capital expenditures) or sale of fixed assets. It would include loans made to other entities to collect interest income. Includes the purchase or sale of available-for-sale and held-to-maturity securities (excludes trading securities). Any acquisition or sale of a business unit would be included in the investing section.