Valuation Glossary

Cash flow from operating activities is a section of a company’s cash flow statement that shows the cash generated or used by the core business operations during a specific period.

Cash flow from investing activities is a section of a company's cash flow statement that reports the cash flows related to the acquisition and disposal of long-term assets and other investments.

Cash flow from financing activities is a section of a company's cash flow statement that shows the cash transactions related to funding the business. This includes cash inflows and outflows from transactions involving equity, debt, and dividends.

Cash flow refers to the movement of money in and out of a business or individual's accounts. It shows how much money is coming in and going out during a specific time. Positive cash flow means more money is coming in than going out, while negative cash flow means more money is going out than coming in. There are three types of cash flow: operating cash flow (from day-to-day business activities), investing cash flow (related to buying or selling assets), and financing cash flow (associated with raising or repaying funds). Analyzing cash flow helps understand a business's financial health and ability to meet its obligations.

A carve-out is a business strategy in which a company sells a portion of its business, often a subsidiary or a specific division, to an outside party, typically while retaining a stake in the entity.