Question

During fiscal year 2018, BHD Inc. had Cash from Operations of $600 million, and Cash Used for Investing of $1,000 million. During the year the Cash account on the balance sheet decreased by $700 million. This implies that the Financing cash flow was an:________.
a. outflow of $300 million
b. inflow of $300 million
c. outflow of $100 million
d. inflow of $400 million

Answer 1

Answer: outflow of $300 million

Explanation:

The formula to solve for the net decrease in cash and the cash equivalent will be:

= Cashflow from financing activities + Cashflow operating activities + Cashflow from investing activities

-$700 Million = Cash flow from financing activities + $600 Million - $1,000 Million

Therefore, the cash flow from financing activities will then be:

= -$700 + $1,000 - $600

= $1000 - $1300

= $-300 million

Therefore, the cash flow from financing activities is outflow of $300 Million.