Cash flow from investing activities is a value published in the cash flow statements featured in quarterly and annual securities filings for publicly traded companies. Net cash from investing is usually displayed between the operating and financing sections of the statement. Each line item is displayed separately, and net cash flows are summed at the bottom of the section. Cash flow from investments is a category defined under generally accepted accounting principles, or GAAP, and is an essential element of fundamental analysis.
Cash flow from investing activities measures the net cash generation from nonoperating and nonfinancing activities. Investments can refer to cash spending on capitalized property and equipment; cash inflows or outflows on securities investments; cash paid for acquisitions; or cash received from divestitures. Capital expense is usually a significant item in cash flows from investments. The section shows investors how a company is using its capital to drive future growth and how gains have been realized from previous investments. Net cash from investments allows investors to evaluate a firm's capital management when assessed in relation to other cash flows and capital structure.
Consider Google's 2014 10-K filing. The cash flow statement is located on page 47 of the filing, and the item called “Net cash used in investing activities” can be found approximately halfway down the page. Net cash flows from investing were approximately -$21 billion in 2014. Google purchased $11 billion of capitalized property and equipment, $56 billion of marketable securities and $1 billion of nonmarketable equity investments. Google also spent $5 billion on acquisitions; $51 billion of cash was generated by the sale and maturity of marketable securities throughout the year and $1 billion was generated by cash collateral related to securities lending.