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During the last year, Globo-Chem Co. generated $1,053 million in cash flow from operating activities and had negative cash flow generated from investing activities (-$576 million). At the end of the first year, Globo-Chem Co. had $180 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm’s cash flow (CF) due to financing activities in the second year

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Answer:

Cash Flow due to financing activities in second year is negative = -$377 million

Explanation:

Format of Cash flow statement is as follows:

Cash Generated From Operating Activities

Add: Cash Generated From Investing Activities

Add: Cash Generated From Financing Activities

Add: Opening Balance of Cash

= Closing Balance of Cash

Now, putting all the values as stated above              Amount in million

Cash Generated From Operating Activities              =$1,053

Add: Cash Generated From Investing Activities       = -$576

Add: Cash Generated From Financing Activities      = x

Add: Opening Balance of Cash                                  = $180

= Closing Balance of Cash                                          = $280

That means  $477 + x + $180 = $280

$657 - $280 = - x

$377 = -x

x = $377

Thus Cash Flow due to financing Activities in second year = - $377 million

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