What is Cash Flow from Financing (CFF)?
Nexa Consultancy | Startup & Finance Glossary
Cash Flow from Financing (CFF) is a section of the Cash Flow Statement that shows the net flow of cash used to fund the company. It includes transactions involving debt, equity, and dividends.
For Startups: For a venture-backed startup, the CFF section is where the cash received from issuing shares in a funding round is recorded. It will show a large positive cash flow after a successful fundraise. Repayment of debt would be shown as a cash outflow.
For Mature Companies: For more mature companies, CFF also includes activities like paying dividends to shareholders or buying back the company's own stock, both of which are cash outflows.
Calculation: CFF = Cash Inflow from Issuing Equity/Debt - Cash Paid as Dividends/Repayment of Debt
Example: A startup raises a ₹10 Crore Series A round. This will be recorded as a ₹10 Crore positive cash flow from financing activities.