Financing Activities in Cash Flow Statement

Financial Accounting
Group Coursework
(Big Yellow Group Plc)

Financing activities
The section of financing activities in a cash flow statement represents net
amount of funding which an organisation generates in a year (Baik and et.al.,
2016). The amount generated from these activities are used to finance the
business. Financing activities are the operations which an organisation
undertake to achieve their economic goals and objectives; such activities
include issue of share capital, sale of shares, dividend payment and many
more. In the present case of Big Yellow Group Plc., which is a self-storing
organisation is accompanying various financing activities for their business
operations. These activities include issue of share capital, equity dividend
payment etc. All these activities are analysed in this question.
Consolidated Company Cash Flow Statement
(Financing)
In the table above, we have a consolidated cash flow statement for two years
(2018 & 2019). As we can see from the above table that there is huge
difference in the cash inflows and outflows between 2018 and 2019. The
major reason behind this difference is the capital which has been raised by
this company by issuing share capital to the public. It is evident that growth
cannot be judged only on the basis of financing activities but this company
can be considered as an effectively growing enterprise as they are
generating more capital and paying high dividends.
ISSUE OF SHARE CAPITAL
In a situation, when a public company intends to increase its capital, they
consider issuance of their share of ownership to the public; that situation is
known as issue of share capital. If an enterprise is willing to acquire funding
for business activities, then it can share the ownership with external parties
for which shares are issued in the market. Big yellow Group Plc has issued
shares for the purpose of funding future operations.
From the financing cash flow table, it has been analysed that in 2019, total
amount of issued shares were £65962000. In order to raise the capital of the
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