Financing cash flow (CFF)

The third and final section of the cash flow statement. CFF tracks how the company funds itself - money coming in from raising capital, money going out to repay capital or reward shareholders.

What's in CFF

Inflows:

• Long-term borrowings raised - bank loans, debentures, bonds issued
• Short-term borrowings raised - working capital lines, commercial paper
• Equity issuance - IPO, FPO, QIP, rights issue, preferential allotment
• ESOP exercises - employees converting options into shares

Outflows:

• Repayment of borrowings - term-loan instalments, bond redemptions
• Interest paid - sits here (above the operating line in many companies' presentation)
• Dividends paid
• Share buybacks
• Lease payments (post IND-AS 116)

A normal pattern

Mature, cash-generating companies show negative CFF - they're paying down debt, paying dividends, and buying back shares. Growing companies typically have positive CFF in capex-heavy years - they're raising capital to fund expansion.