Investing cash flow (CFI)

The middle section of the cash flow statement. CFI shows cash spent on (or received from) long-term assets and investments - things the company expects to hold or use for more than a year.

What's in CFI

Outflows (cash going out):

• Capex - buying property, plant, equipment. The biggest line for most companies.
• Acquisitions - buying another business.
• Long-term investments - equity or debt securities held strategically.
• Capital advances - payments for capex not yet capitalised.

Inflows (cash coming in):

• Sale of fixed assets - old factories, land, equipment.
• Sale of investments - divestments, mutual fund redemptions.
• Interest and dividends received on investments.
• Maturity of fixed deposits longer than a year.

A normal pattern

A healthy growing company shows negative CFI every year - they're investing for growth. The size depends on the sector:

• IT services: small CFI outflow (no factories needed)
• Pharma: medium CFI outflow (plants + R&D capitalised)
• Cement, steel, telecom: very large CFI outflow during expansion phases