What is Cash Flow from Investing (CFI)?

Cash Flow from Investing (CFI) is a section of the Cash Flow Statement that shows the cash generated or spent from a company's investment activities. It includes the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E), as well as investments in other companies.

For Startups: A negative CFI is common and expected for growing startups, as it reflects investment in the infrastructure needed for growth (e.g., buying servers, building an office). A large positive CFI might indicate the company is selling off assets, which could be a red flag.

For Businesses: CFI provides insight into a company's capital expenditure (CapEx) strategy and its long-term investment plans.

Calculation: CFI = Cash from Sale of Assets - Cash for Purchase of Assets

Example: A manufacturing startup spends ₹1 Crore on new machinery. This would be shown as a ₹1 Crore cash outflow in the Cash Flow from Investing section.