What is Financing Cash Flow?
Financing cash flow is the section of the cash flow statement that reports cash movements between a business and its providers of capital — shareholders and lenders. It includes share issuances, dividends, loan drawdowns, and debt repayments.
How It Works
- Add cash inflows from new equity raises or loan proceeds.
- Subtract cash outflows for dividends, share buybacks, and principal repayments.
- Net result shows whether the business is raising or returning capital.
Saudi Context
Saudi listed companies file cash flow statements that separate financing activities under IFRS rules. Sukuk issuances, SAR-denominated bank facilities, and dividend payments to Tadawul shareholders are common financing flows.
Example
A Saudi company raises SAR 50 million in a sukuk issuance and pays SAR 10 million in dividends. Net financing cash flow is +SAR 40 million.