Non Operating Cash Flows

Posted in Finance, Accounting and Economics Terms, Total Reads: 1362

Definition: Non Operating Cash Flows

Cash flows are one of the most important parameters looked at by the investors of a company to gauge its financial health as well as to predict its future economic standing.

Cash flows are of two kinds:

a) Operating cash flows

b) Non operating cash flows


b) As the name suggests refer to the cash flows which are not generated from the core activities of a firm. These are the cash flows not related to the day to day operations of the firm. These include borrowings, cash flow from issuance (inflow), purchase (outflow) of stock, cash flow from asset sale, dividend payments and other investment activity.


Cash flows are also split into 3 components: i) Operating cash flow

ii) Cash flow from investment

iii) Cash flow from financing


ii), iii) are together known as non operating cash flows


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