Accountancy Part BCash Flow Statement

Identify the amount of net cash flow from financing activities on the…

Identify the amount of net cash flow from financing activities on the basis of following Information :

Particulars	1^st April 2022 (₹)	31^st March 2023 (₹)
Equity Share Capital	28,00,000	35,00,000
Bank Loan	12,50,000	5,50,000

Bank loan raised during the year ₹2,00,000.

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → No flow of cash

Issue of shares, raising of loans and repayment of loans are all financing activities. The repayment of the bank loan is not given directly and is found from the loan account.

Issue of equity shares = ₹35,00,000 − ₹28,00,000 = ₹7,00,000 (inflow)
Bank loan raised = ₹2,00,000 (inflow)
Bank loan repaid = ₹12,50,000 + ₹2,00,000 − ₹5,50,000 = ₹9,00,000 (outflow)
Net cash flow from financing activities = ₹7,00,000 + ₹2,00,000 − ₹9,00,000 = Nil

Note: Taking only the fall in the loan balance (₹7,00,000) as repayment leaves out the ₹2,00,000 raised during the year; the inflow and outflow must both be shown, and they cancel out here.

NCERT (2026-27 edition):
Cash from Financing Activities – “As the name suggests, financing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term bank loans, repayment of bank loan, etc.”