Real‑world examples of cash flow from investing activities examples

The most common examples of cash flow from investing activities examples

When analysts talk about examples of cash flow from investing activities examples, they’re usually talking about long‑term bets: buying or selling assets that will affect the business for years. On almost every cash flow statement, you’ll see a cluster of familiar investing lines:

• Purchases of property, plant, and equipment (PP&E)
• Proceeds from sale of PP&E
• Purchases and sales of investments (stocks, bonds, funds)
• Acquisitions and divestitures of businesses
• Capitalized software and intangible assets

These are not small housekeeping items. They’re the corporate equivalent of buying a house, selling a rental property, or reshuffling your 401(k). The best examples of cash flow from investing activities examples are the ones that clearly signal strategy. Let’s walk through them in real‑world context.

Example of cash flow from investing activities: Building and upgrading assets

For most asset‑heavy companies, the biggest investing cash flow is capital expenditures (CapEx): cash spent on property, plant, and equipment.

Imagine a U.S. manufacturer spending $800 million to build a new factory in Texas. On the cash flow statement, under investing activities, you’d see something like:

Purchases of property, plant and equipment: $(800)

That negative number is a cash outflow. It doesn’t mean the company is in trouble; it often means the opposite: management is betting on future demand. In 2024, you see this pattern across the semiconductor and EV supply chain, where firms are pouring billions into new capacity in the U.S. and Europe.

Now flip it. Suppose the same company shuts an old plant and sells the land and building for $120 million:

Proceeds from sale of property, plant and equipment: $120

That’s a cash inflow from investing activities. On its own, it might look healthy (cash coming in!), but strategically it could mean downsizing, offshoring, or shifting to contract manufacturing. The context matters more than the sign.

These two line items—purchases and sales of PP&E—are some of the cleanest, most frequent examples of cash flow from investing activities examples you’ll see in practice.

Best examples of cash flow from investing activities examples in Big Tech

If you want vivid, modern examples of cash flow from investing activities examples, look at the large tech platforms. They’re asset‑light compared with industrials, but their investing sections are still packed with signals.

Take a hypothetical large cloud provider in 2024:

• It spends $30 billion on data centers, servers, and networking equipment to support AI workloads.
• It spends another $5 billion on capitalized internal‑use software.
• It buys a smaller AI startup for $2 billion in cash.
• It sells a non‑core mapping business for $600 million.

On the cash flow statement, you would see:

• Purchases of property and equipment: $(30,000)
• Capitalized internal‑use software: $(5,000)
• Acquisition of business, net of cash acquired: $(2,000)
• Proceeds from sale of business: $600

The net investing cash flow is a large outflow, but investors cheer it because it aligns with a long‑term AI and cloud strategy. These are textbook examples of cash flow from investing activities examples that are strategically positive despite being deeply negative in the period.

For a sense of how these items are defined in accounting standards, the FASB (Financial Accounting Standards Board) provides guidance on classification of cash flows by activity type in its codification, accessible via the FASB site.

Examples include acquisitions, divestitures, and equity stakes

Beyond PP&E, some of the most telling examples of cash flow from investing activities examples are the big, lumpy transactions: buying or selling entire businesses or chunks of them.

Acquisitions (cash outflows)

When a company acquires another business using cash, the payment sits squarely in investing activities. For instance, if a consumer goods company buys a premium beverage brand for $3.5 billion in cash, you’ll see:

Acquisition of business, net of cash acquired: $(3,500)

This is a cash outflow from investing activities and often appears only once every few years, but it can reshape the company’s growth profile and risk.

Divestitures (cash inflows)

Now reverse the scenario. Suppose the same company sells a non‑core snack business for $1.2 billion:

Proceeds from sale of business: $1,200

This is an inflow and one of the clearer examples of cash flow from investing activities examples that actually frees up capital for debt reduction, buybacks, or new investments.

Minority equity stakes and venture investments

In the 2020s, many large corporates behave like mini venture funds. A chipmaker might invest $500 million for a 10% stake in a battery startup. On the cash flow statement:

Purchases of equity investments: $(500)

If that stake is later sold for $900 million, you’d see:

Proceeds from sale of equity investments: $900

These are classic investing cash flows. They don’t show up in operating income, but they can meaningfully affect long‑term returns.

For more background on how investments are reported, see the U.S. Securities and Exchange Commission’s investor education resources on financial statements at Investor.gov.

Less obvious example of investing cash flow: Intangibles and R&D strategy

Physical assets get all the attention, but in software, pharma, and media, many of the best examples of cash flow from investing activities examples involve intangible assets.

Capitalized software

A SaaS company might spend $200 million on developing a new platform. Depending on the accounting policy, a portion might be capitalized as an intangible asset rather than expensed immediately.

Cash flow impact:

Capitalized software development costs: $(80)

That $80 million is an investing outflow, even though it relates to R&D. Analysts tracking free cash flow to the firm watch this line closely, because it’s effectively part of the company’s ongoing investment requirement.

Patents, licenses, and media rights

A pharmaceutical firm might pay $600 million for rights to a late‑stage drug candidate. A streaming platform might pay billions for long‑term content rights.

These payments typically appear as:

Purchases of intangible assets: $(600) (or more)

Again, these are cash outflows from investing activities, and they’re some of the most revealing examples of cash flow from investing activities examples in knowledge‑driven industries.

For a more technical discussion of intangible assets and research costs, the IFRS Foundation provides free educational material on IAS 38 and related standards at ifrs.org.

Short‑term investments: Parking cash vs. deploying it

In a high‑rate environment like 2024–2025, many companies hold short‑term investments—Treasury bills, commercial paper, or money market funds—to earn yield on excess cash.

Suppose a large retailer with strong holiday cash flow decides to park $2 billion in 3‑month U.S. Treasuries:

Purchases of short‑term investments: $(2,000)

Three months later, those mature and the company receives $2.02 billion (principal plus interest). The principal portion:

Proceeds from maturities of short‑term investments: $2,000

is an investing inflow. The interest income flows through operating activities under U.S. GAAP for most non‑financial firms.

So even very safe, temporary cash parking creates vivid examples of cash flow from investing activities examples. Watching this section tells you whether a company is hoarding cash, earning yield, or moving money back into operations and growth.

How to read these examples in 2024–2025 market context

In the 2024–2025 environment, three macro trends are shaping the examples of cash flow from investing activities examples you’ll see in filings:

1. Higher interest rates.
With U.S. policy rates elevated relative to the 2010s, companies are more selective about big CapEx programs and acquisitions. You’ll often see:

• More disciplined, phased PP&E spending
• Increased purchases of interest‑bearing securities
• Fewer mega‑deals financed purely with cash

2. Supply chain reshoring and infrastructure spending.
Manufacturers, chipmakers, and energy firms are still reacting to pandemic shocks and geopolitical risk. That shows up as:

• Large outflows for new U.S. plants and warehouses
• Inflows from selling older overseas facilities

3. Digital and AI investment.
Across sectors, you’ll notice a steady rise in:

• Capitalized software development
• Data center and networking CapEx
• Strategic equity investments in AI startups

These are not abstract accounting quirks; they’re the current, real‑world best examples of cash flow from investing activities examples that investors debate on every earnings call.

For macro context and data on business investment, the U.S. Bureau of Economic Analysis provides time series on private nonresidential fixed investment at bea.gov.

How investors use examples of cash flow from investing activities examples

Looking at isolated line items is nice, but the real value comes from pattern recognition. When analysts study examples of cash flow from investing activities examples over several years, they’re asking:

• Is the company consistently investing enough to maintain and grow its asset base?
• Are big acquisitions followed by divestitures or impairments (a red flag)?
• Is management shifting from building assets to harvesting them (a sign of maturity or distress)?

A fast‑growing logistics company, for example, might show:

• Large negative investing cash flows every year from fleet and warehouse expansion
• Occasional inflows from selling older trucks and facilities

A mature tobacco company might show:

• Modest CapEx
• Periodic inflows from selling non‑core assets
• Outsize financing cash flows from dividends and buybacks

Same accounting framework, very different stories. The investing section is where those stories become obvious.

FAQ: examples of cash flow from investing activities

What are common examples of cash flow from investing activities examples on a cash flow statement?
Common examples of cash flow from investing activities examples include purchases and sales of property, plant, and equipment; acquisitions and divestitures of businesses; purchases and sales of equity or debt investments; capitalized software development; and purchases of intangible assets like patents, licenses, or media rights.

Can you give an example of a positive investing cash flow that is actually a bad sign?
Yes. A company that sells factories, brands, or key subsidiaries to raise cash will show positive investing cash flow from those asset sales. If those inflows are funding operating losses or debt repayments rather than a clear strategic shift, that positive investing cash flow can signal distress, not strength.

Are marketable securities an example of cash flow from investing activities?
Typically, yes. Buying Treasury bills, corporate bonds, or similar instruments is recorded as an investing cash outflow; maturities and sales are investing inflows. The interest income usually flows through operating activities for non‑financial companies under U.S. GAAP.

How do acquisitions appear as an example of investing cash flow?
When a company acquires another business with cash, the payment (net of any cash acquired) appears in the investing section as an outflow, often labeled “Acquisition of business, net of cash acquired.” It is one of the clearest single‑period examples of cash flow from investing activities examples.

Where can I learn more about how investing cash flows are classified?
For U.S. companies, the SEC’s investor education pages at Investor.gov walk through the structure of the cash flow statement. For global standards, the IFRS Foundation’s materials at ifrs.org explain how IAS 7 classifies operating, investing, and financing cash flows.