Financing Cash Flow

Financing cash flow tells you who is funding the company. Persistently positive financing cash flow alongside negative operating cash flow is the defining pattern of a business kept alive by lenders and shareholders rather than by customers. A mature company should show negative financing cash flow, returning capital through dividends and debt repayment. Reading the three sections together is the whole discipline: operating positive, investing negative and financing negative is a self-funding business, while the reverse combination is a warning that no single ratio will show you.