CFA Level I · CFA Level I Exam · Analyzing Statements of Cash Flows I
Which of the following cash flows is most likely classified as a financing activity under IFRS?
Cash paid to repurchase the company's own shares is a financing outflow because it relates to equity capital raised from owners. Buying a competitor's bonds is investing, and receipts from customers for goods sold are operating cash flows.
- ACash paid to repurchase the company's own sharesCorrect
- BCash paid for the purchase of a competitor's bonds
- CCash received from customers for goods sold
Explanation
Share repurchases change the capital structure and are financing outflows. Purchasing another entity's bonds is an investing activity, and customer receipts are operating.
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